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1991 DIGILAW 193 (PAT)

Manoharlal Agarwalla v. Commissioner, North Chotanagpur Division

1991-04-30

S.B.SANYAL

body1991
Judgment S. B. Sanyal, J. 1. The resort to Articles 7 and 9 of Schedule I of the Bihar and Orissa Public Demands Recovery Act, 1914 (to be referred to as the act) for recovery of auction bid money for the forest coupe without "use and enjoyment" of the forest right is the bottom-line question in this writ petition. 2. This writ application is for quashing of Annexures-4 and 6, the appellate and revisional orders under the act on the ground that the demand raised is not a public demand and for restoration of the order of the Certificate officer (Annexure-3) refusing to realise the demand. FACTS 3. Pursuant to an auction notice for the sale of forest produce by the forest Department, the petitioner became the highest bidder for forest coupe lot Nos.17 and 19, the highest bid amounts being Rs.30,100/- and rs.20,100/-. In terms of the auction notice, the petitioner deposited rs.6,020/- and Rs.4,020/- respectively for the above lots. The purchaser, under the terms of the auction notice (Annexme-1) was required to deposit the purchse price in one instalment within twentyone days from the date of ratification of the sale by the competent authority. Twentyone days was required to be reckoned from the date of despatch of the ratification order to the highest bidder. On failure to deposit the purchase price within the stipulated period of twentyone days, the bidder was to forfeit the security money and he shall have no claim on the forest produce purchased by him. These were the terms under clauses 8 and 9 of the auction notice. 4. Admittedly, there is no written instrument that the money payable shall be recoverable as a public demand. Further, the auction notice does not postulate the liability to pay damages beyond forfeiture of the security money. 5. A Government circular dated 19-11-1977 (Annexure-2) has been brought on the record to show that for a concluded contract, the acceptance of the offer must be communicated within ninety days of the auction bid. The District Certificate Officer Dhanbad (respondent No.3) dismissed the Certificate Case No.3 (f) of 1980-91 (vide Annexure-3), which was initiated for recovery of the balance amount of the bid money from the petitioner as the contract was not concluded within the stipulated period and, therefore, not binding. The District Certificate Officer Dhanbad (respondent No.3) dismissed the Certificate Case No.3 (f) of 1980-91 (vide Annexure-3), which was initiated for recovery of the balance amount of the bid money from the petitioner as the contract was not concluded within the stipulated period and, therefore, not binding. As against the said decision, the certificate-holder, namely, the divisional Forest Officer, Dhanbad (respondent No.4) preferred an appeal before the Additional Collector, Dhanbad (respondent No.2) and the appeal was allowed by respondent No.2 by order dated 18-1-1984 (vide Annexure-4)on the ground that the registered letter ratifying the auction was posted on 7-12-1987 within the stipulated period of ninety days, and, therefore, a binding cantract. A revision was preferred by petitioner against the order dated 13-1-1984 before the respondent No.1 in certificate Revision No.9 of 1984, which was dismissed in limine (vide Annexure-6 ). 6. The learned counsel for the petitioner contended that : (a) the petitioner having not allowed "use and enjoyment" of the forest right for his failure to deposit the bid money within twenty-one days under the auction notice, damages, if any, cannot be realised as a public demand under Article 7 of Schedule I of the Act ; (b) the acceptance of the offer having not matured into a concluded contract by not accepting the offer within the period of ninety days, the demand cannot be held to be public demand realisable under the Act ; and, 7. Learned Government Pleader No.1, on the other hand, contended that under Clause 8 of the auction notice (Annexure-1), the dated of despatch of the ratification order would be treated as the date of acceptance of the offer made by the petitioner. In support of this submission, apart from clause 8, he has relied upon Sec.4 of the Indian Contract Act to show that the communication of an acceptance is complete as against the proposer when the communication is put in a course of transmission to the proposer so as to be out of the power of the acceptor to revoke it. The contract, according to the learned Government pleader No. I, was compleate when the letter of ratification was despatched on 7-12-1987, much within the ninety days. The Government Pleader No.1 also contended that the forest produce are goods within the meaning of Sec.2 (7)of the Sale of Goods Act, 1930. The contract, according to the learned Government pleader No. I, was compleate when the letter of ratification was despatched on 7-12-1987, much within the ninety days. The Government Pleader No.1 also contended that the forest produce are goods within the meaning of Sec.2 (7)of the Sale of Goods Act, 1930. Therefore, under Sec.55 (2) of the sales of Goods Act, the seller is entitled to realise the sale price, if not paid, although the property in the goods has not passed and the goods have not been appropriated to the contract. The liability, therefore, to pay the sale price of the timber is irrespective of the petitioner being able to take possession of the goods. In this connection, reliance has also been placed on Sec.73 of the Indian Contract Act, which envisage liability for loss or damage caused when a contract has been broken by the suffrer from the party who has broken the contract. 8. Payability of any demage does not arise under the terms and conditions of the auction notice since all that the auction bidder is required to suffer, in the event of his failure to deposit the bid money, is the security paid to be forfeited. There is no written instrument and/or bulateral instrument which postulates payment of bid money, even in the event of no "use and enjoyment" of the forest produce. The question whether the liability to pay damages accrue, even if there is no appropriation of the goods to the contract, is purely academic for the purpose of this writ petition. The challenge in the writ petition is the means to realise damages. I, however, find force in the argument of the learned government Pleader that the offer was accepted within ninety days when the registered letter was put to transmission, and not on the date the registered letter was received by the proposer in view of the provision of Sec.4 of the Contract Act. 9. This takes me to the consideration of section 3 (6) read with Articles 7 and 9 of Schedule I of the Act which read as hereunder : "7. Any demand payable to the Collector by a person holding any interest in land, pasturage, forest-rights, fisheries or the like, whether such interest is or is not transferable, when such demand is a condition of the use and enjoyment of such land, pasturage, forest-right, fisheries or other things.9. Any demand payable to the Collector by a person holding any interest in land, pasturage, forest-rights, fisheries or the like, whether such interest is or is not transferable, when such demand is a condition of the use and enjoyment of such land, pasturage, forest-right, fisheries or other things.9. Any money payable to a servant of the government or any local authority, in respect of which the person liable to pay the same has agreed, by a written instrument, that it shall be recoverable as a public demand. Explanation -This item shall not apply to any money or demand specified in items 3, 4 and 7. " 10. A mere perusal or Article 7 of Schedule I of the Act manifests : (i) Any demand to constitute a public demand must be payable to the Collector ; (ii) The demand must arise for holding any interest in forest-right ; and, (iii) The demand is a condition for the "use and enjoyment" of the forest-right. This Article cams to be considered in various decisions of this Court, to wit, S. A. Mannan V/s. State of Bihar, (1958) ILR 37 Patna 302. Prabhu-nath Singh V/s. State of Bihar, (1981) BLJR page 125) and lastly by a Full Bench of this Court in the case of Ramchandar Singh V/s. State of Bihar, 1987 PLJR page 47. The Full Bench while overuling the two Patna decisions aforesaid, held that the phrase "any interest" should be given its broad meaning, and a person who has obtained the right to collect tolls and settles of a Hat in absence of a registered lease, should be held to have interest in land and any unpaid bid money is realisable under Article 7 of Schedule I. While dealing with the question of "any interest in land", the Full Bench observed : "the firm concurrent finding of fact by the Certificate Officer and the appellate Collector is that the petitioner was put in possession (emphasis added) of the Hat and had actually exercised that right continuously for well high nine months to make the collection of tolls thereafter. In this context would it possibly be said that he did not hold any interest in the Hat and was not liable to the collector for the bid amount which was a condition of the use and enjoyment of such a Hat The answer seems to be too plain to call for further abcration. " it will, therefore, be seen that in Ram Chandra Singhs case, the bidder was in possession of the Hat for the purpose of collection of tolls and the money payable to the Collector was for such "use and enjoyment". The demand, therefore, is a condition for the "use and enjoyment" of the forest right. The words "holding an interest in land or forest right" have to be read as a con-dition of "use and enjoyment". 11. I, therefore, conclude that the payability of the demand must arise out of holding interest in forest right for the purpose of "use and enjoyment" of the said right. In other words, the demand must arise out of "use and enjoyment" of the forest right, and not in absence of "use and enjoyment". The holding of an interest in forest right is because of the "use and enjoyment of the said right". In substance, the interest in forest right must be read in conjunction with the "use and enjoyment" of such forest right. No person can be deemed to hold interest in fores* right in absence of its "use and enjoy-ment" of such right. 12. In the instant case, the petitioner never came in possession of the forest for its "use and enjoyment" as he failed to deposit the bid money within twentyone days of the date of ratification. There is no finding by any of the two Courts below that the petitioner ever enjoyed and/or used his forest right pursuant to auction bid. I am, therefore, of the view that Article 7 of schedule I, in the facts and circumstances of this case, is in applicable. 13. Article 9 of Schedule I of the Act, on its very face, is not attracted, inasmuch as there is no agreement which the petitioner has entered by a written instrument that the unpaid bid money could be recoverable as a public demand. Further, the Explanation to Article 9 manifests that Articles 7 and 9 are mutually exclusive. 14. 13. Article 9 of Schedule I of the Act, on its very face, is not attracted, inasmuch as there is no agreement which the petitioner has entered by a written instrument that the unpaid bid money could be recoverable as a public demand. Further, the Explanation to Article 9 manifests that Articles 7 and 9 are mutually exclusive. 14. For all these reasons, the order passed in Sairat Appeal No.2/103 of 1982 dated 13-1-1984 (Annexure-4 and the order dated 31-1-1984 in certificate Revision No.9 of 1984 (Annexure-6) are quashed and that the order dated 10-12-1981 passed in Certificate Case No.3 (f) of 1980-81 by the district Certificate Officer, Dhanbad (respondent No.3) as contained in annexure-3 is restored. 15. This writ application is, accordingly, allowed, but there will be no order as to costs. Application allowed.