Heard Shri AB Choudbury, the learned Advocate for the petitioner and also heard Mr B. Goswami, Govt Advocate for the State respondents and also heard Mr. N. Ahmed, the learned Advocate for the respondent No.7. 2. The Bipin Stone Quarry Mahal for 1997 was settled with the writ petitioner subject to appeal provision for a period of six months vide order dated 29.7.97, that period of six months was to run from the final date of settlement. Sri Nuruzaman, respondent No.8 herein filed an appeal against the settlement of the quarry in question with the writ petitioner, so, the settlement of the Mahal was kept in abeyance as communicated vide letter dated 16.8.97. The appellant Md Nuruzaman withdrew the appeal vide his letter dated 8.10.98. Thereafter, one Md Amran Khan, respondent No. 7 herein, submitted a prayer petition dated 28.7.98 to the Govt' for direct settlement of the Mahal as provided in Rule 3 of the Assam Sale of Forest Produce Coupes and Mahals Rules, 1977 which is as quoted below: “3. Mode of sale- (a) The Forest produce shall be sold by any of the following methods: (1) By inviting tender, (2) By public auction, (3) By negotiation, direct by Govt or on behalf of Govt of Assam in Forest Department or any other manner as decided by Govt on its own discretion.” Rule 28 is also quoted below: “(i) Notwithstanding any of the provisions contained in these rules, the Govt of Assam in Forest Department reserve the right to settle or dispose of any forest produce in the form of Mabal, coupes or by direct negotiations or in any other manner at its discretion, otherwise than mentioned in these rules in public interest or in accordance with provisions of the Assam Forest Regulations, 1891. (ii) Any act done or purported to have been done prior to the introduction of these Rules of 1977 or any action taken or purported to have been taken under the Settlement Rules, 1967 shall be deemed to have been done under the new Rules, 1977. (iii) No State Govt or State Govt Officers or Forest Officers shall be responsible for loss or damage unless he shall nave caused the same maliciously or fraudulently prior to the enforcement of these rules or thereafter under these rules.” 3. (iii) No State Govt or State Govt Officers or Forest Officers shall be responsible for loss or damage unless he shall nave caused the same maliciously or fraudulently prior to the enforcement of these rules or thereafter under these rules.” 3. Power given to the Govt under Rule 3 and 28 to sell any forest produce by direct negotiation are not absolute. So, there is no doubt that the power is available to the Govt under Rules 3 and 28 to sell any forest produce by direct negotiation but that power is not absolute and or arbitrary power which can be exercised by the authority in accordance with its whims and pleasure. 4. Rules 3 and 28 came up for consideration before this Court in (1991) 2 GLR (NOC) 16 Chittarnajan Ganguly vs. State of Assam & others (1990 (2) GLJ 370), the Division Bench of this Court laid down the law as follows: “According to sub-rule (3) of Rule 3, forest produce can be sold by negotiation directly by the Govt or in any manner as decided by the Govt on its own discretion. Rule 28 (i), inter alia, provides that notwithstanding any of the provisions in the rule, the Govt shall have right to settle or dispose of any forest produce in the form of Mahal, coupes by direct negotiations or in any other manner at its discretion in public interest and in accordance with the provisions of Assam Forest Regulations, 1891. It is true that in view of the above provision forest produce may be sold by the State Govt by negotiations or otherwise or in any other manner, but in doing so the public interest has to be kept in mind, and that apart these are being largesse of the State Govt, it cannot choose to deal with these produces as it pleases. Such settlement or sale of forest produces must be in the public interest and in doing so, the State Govt shall have to take all reasonable steps to obtain the best available market price. Such £ settlement etc cannot be done secretly or arbitrarily. Court will-strike down any such settlement made directly by the State Govt under the above rules unless the action is reasonable, fair and in public interest. We are, therefore, unable to accept the conte­ntion of Mr. Such £ settlement etc cannot be done secretly or arbitrarily. Court will-strike down any such settlement made directly by the State Govt under the above rules unless the action is reasonable, fair and in public interest. We are, therefore, unable to accept the conte­ntion of Mr. Sen that the power given to the Govt by the aforesaid rules is absolute.” 5. Power of the Govt to withdraw the Mahal for settlement also came up for consideration before the Division Bench of this Court, reported hi (1983)1 GLR (NOC) 61, Bipin Chandra Phukan vs. State of Assam & others, the Division Bench pointed out as follows: “Under Rule 8 (2) of the Rules the Govt in the Forest Department has the full power or has the full residuary powers of withdrawal of settlement or otherwise not repugnant in the Rules. This provision has been made in the procedure for dealing with tenders. There is no mention of the competent authority, so far as the power of withdrawal is concerned, in this sub-rule. Under Rule 20 of the Rules both the Govt in Forest Department and the authority competent to accept tender shall have the right to withdraw. While sub-rule (2) of Rule 3 speaks of 'the full power or full residuary powers of withdrawal. Rule 20 speaks of the right to withdraw. There is no doubt that the Govt in Forest Department and the authority competent to accept tender shall have the right to withdraw any coupe or mahal from sale as provided in Rule 20. It may be that settlement cases often contain an element of policy wherefrom rights may be reserved to withdraw the matter from sale by appropriate authority. But licensing or leasing among contestants is being regarded as a judicial function and, therefore, subject to natural justice. It is being recognised that settlement is a drastic power, greatly affecting the rights of citizens, and that this demands fair administrative procedure. Natural justice is demanded in case of revocation, suspension of lease or settlements already granted; and the same principle is being applied to initial leases or settlements as well. In the words of Lord Denning, according to the modern judicial vocabulary, the authorities in these matters "act administratively but are required to act fairly. “It is, therefore, the duty of the authorities in this respect to observe natural justice.” 6. In the words of Lord Denning, according to the modern judicial vocabulary, the authorities in these matters "act administratively but are required to act fairly. “It is, therefore, the duty of the authorities in this respect to observe natural justice.” 6. In AIR 1968 A & N 64, TD Francis vs. Chief Executive Member, North Cachar Hills District Council, Haflong & others, this Court considered the question of violation of principle of natural justice in the case of cancellation of settlement. The Court pointed out as follows: “The rules embodied under the Assam Forest Regulation are statutory in character and a statutory character attaches to the provisions of the tenders which are called for under Rule 10.” As such, when a tender submitted by 'A' was accepted and land settled on him in an appeal by another party 'B' against such an order the District Council cannot change the order in favour of 'B' without giving a chance of hearing to 'A'. Any such order, which prejudices 'A' if passed behind his back is a violation of the principles of natural justice.” 7. On withdrawal of the appeal as indicated above, the Mahal was settled with Arnran Khan for six months by the Govt vide order dated 13.11.98 and the writ petitioner on being aggrieved, submitted a representation dated 4.12.98 direct to the Minister of Forest challenging the settlement of the Mahal stating that the settlement holder is eligible. On receipt of the prayer petition, the Govt stayed the settlement and asked for detailed report. The report was called for from Nagaon Division by the Govt and the settlement was stayed till final disposal of the prayer made by Sri Manoj Prasad, the petitioner herein. Subsequently, on 10.3.99 the stay order of the Govt vide letter dated 23.12.98 was vacated by the Govt on 10.3.99. In pursuance of the Govt order dated 10.3.99, the DFO allowed the Mahal for six months to respondent No.7 and the term of the Mahal will expire on 27.9.99. Though the settlement is in favour of respondent No.7 appears to be not in accordance with the Rules and the law laid down by this Court, I am not inclined to interfere with the settlement as that will cause unnecessary loss of revenue to the State and the writ will be futile. Though the settlement is in favour of respondent No.7 appears to be not in accordance with the Rules and the law laid down by this Court, I am not inclined to interfere with the settlement as that will cause unnecessary loss of revenue to the State and the writ will be futile. Further, the authority before putting the Mahal on sale, shall consider the right of the petitioner and if feasible, shall give settlement as was given to respondent No. I remit the whole matter for consideration, but it is made clear that no further extension shall be given to respondent No.7 as he has made already wrongful gain by the order of settlement. There can be no extension of extension. The record produced by Mr. Goswami, shall be returned to him. If aggrieved, the petitioner may again approach this Court. With these observations, this writ petition stands disposed of.