K. Mohammed Ali vs Chief Conservator of forest and Others

Sukumaran, J.—This writ petition is a typical forest contractor''s motion resisting recovery of loss sustained by the Government when, consequent on his default, a re-auction is held resulting in the reduction of the bid amount originally offered by the Petitioner.

That he had been carrying on the business as a dealer in timber and firewood, is admitted by him. According to the Government, he was a regular forest contractor and therefore aware of all movements regarding the auctions in relation to the forest produce in the area.

A notification in relation to the auction finalised on 27th November 1981 by the Government was published in the Kerala Gazette only on 15th December 1981. Ext. P-1 is an extract of the auction sale notification. Timber and firewood were auctioned under it. The auctions have to be confirmed. Different authorities are designated for confirming auctions in respect of the two different produce, timber and firewood. Confirmation came quick in the case of teak timber, on 17th April 1982, by the Divisional Forest Officer. The Conservator to whom the papers have to be forwarded along with the relevant records and accounts, could confirm the auction only on 23rd May 1982. Even according to the Petitioner, intimation about confirmation was received by him only on 29th June 1982.

The timber was removed by the Petitioner, during the months of June, July and August. He did not, however deposit the balance bid amount in respect of the firewood. He had 52 days'' time from the date of confirmation for such deposit. Admittedly he made a default.

In the light of the default on the part of the Petitioner, steps were taken for the re-auction. It was notified as to be held on 19th January 1983. The notification was published in the Kerala Gazette dated 28th December 1982. Three newspapers, two in Malayalam and one in Tamil, Desabhimani, Pradeepam and Dinamalar, published the notification on 9th January 1983, 12th January 1983 and 11th January 1983 respectively. The Petitioner was also intimated personally by a letter dated 13th January 1983. The postal acknowledgement of that notice bear the date 21st January 1983. The Petitioner did not remit any amount even then.

The auction proposed on 19th January 1983 was again postponed, in view of a post offer of a higher amount, after remitting the entire amount in advance. The offer would appear to have been part of a calculated scheme. Under the scheme, the original bidder, if a man of sufficient means, gets a technical exoneration when the offer is at rates equal to or more than the rates at the previous auction. Quite often, such offers come from fictitious persons or from men of straw. The Government is thereafter precluded from proceeding against the original bidder, as there was no loss at the re-auction. The Government can only spend good money after bad, if the defaulters are sought to be proceeded against for breach of agreement. The Forest officials could be privy to it, if they are corrupt. The gullible among them can be misled. The post offer turned out to be a fraud. It necessitated a re-auction. The re-auction was fixed on 21st April 1983.

The notification was published in the Malayalam daily Chandrikaon 1st April 1983 and in the Kerala Gazette on 5th April 1983. A notice sent to the Petitioner by post was received by him on 26th March 1983. As regards the re-auction on 21st April 1983 the Petitioner had more than one week''s time for remitting the balance amount and averting the sale. Admittedly the Petitioner did not avail of that opportunity either.

In the re-auction so held, the Government sustained a loss of Rs. 36,363. The Petitioner, did not make good the loss so clearly sustained by the Government consequent on his default. By a communication Ext. P-2 dated 19th October 1983, he was directed to remit the amount on or before 30th November 1983. He did not comply with that notice. He moved this Court challenging the recovery proceedings. This Court by judgment Ext. P-3 dated 31st October 1984, directed that his contentions would be disposed of by the Chief Conservator of Forests, if a representation was made within 10 days of the disposal of the writ petition. Recovery was deferred in the meanwhile. The Petitioner was satisfied.

Ext. P-4 representation was filed by him on 6th November 1984. That was disposed of by the Chief Conservator of Forests only on 26th July 1986 by Ext. P-5 order. The contentions were rejected. That order is in challenge in this writ petition.

This writ petition was filed on 11th September 1986, challenging the recovery proceedings. A conditional interim stay was granted. No attempt was made to file the counter affidavit, despite a pressing need for the Government for seeking a final decision in the matter, when substantial amounts due to it had been blocked up. The counter-affidavit was filed only on 16th August 1988.

I am disinclined to grant any relief to the Petitioner exercising the powers under Article 226 of the Constitution.

The over all conduct of the Petitioner, would reveal that the Petitioner has not come to the Court with clean hands or with pure contentions. This Court should not encourage such persons and such practices. He auctioned timber and firewood. Timber, he transported. Default was only in relation to firewood. The excuse put forward at that time was the inconvenience caused by the monsoon that set in when his auction was confirmed in relation do firewood. The Chief Conservator has rightly noted that he could transport without difficulty the entire teak timber during June, July and August of that year. The bulky file contains crying evidence of the brisk transport he made of teak timber, for which he had appointed agents and made adequate arrangements. If monsoon did not impede movement of teak timber, it could not have impeded the movement of teak firewood.

Yet Anr. ground mentioned by him related to the deterioration of the goods. He was himself responsible for such deterioration. A delay of three months in confirmation, which had to be granted by the Conservator of Forest, cannot, in the scheme of things, be characterised as totally arbitrary. The conditions of sale visualised some delay necessarily involved in the transport of the goods after the confirmation of the sale. This is evident from Clause 3 and Clause 9 of the sale conditions stipulated for the auction. The papers and records had to be submitted to the D.F.O. who conducted the auction. The processing of the papers in a different office, could naturally take some time. Looked that way, the confirmation on 29th June 1982 cannot be characterised as involving unreasonable delay. The files produced also do not indicate any deliberate inaction or mala fide procrastination of necessary action.

It requires gullibility of an extraordinary degree to accept the Petitioner''s contention that the firewood got decayed quick. It is a well-known fact that teak, whether as timber or as firwood, would not easily of quickly deteriorate. "...teak among hardwoods stands in a class by itself as representing the ideal wood for durability and strength...." (See Timber By William Bullock, III Edition, Page 55). As for India, this is not a new knowledge. ''Vrikshayurveda'' classified trees also into four varnas, presumably in consonance with the then prevalent concepts of classification of society. Teak was referred to as a Royal Executive (Kshathriya). Bhojan''s Yukthikalpatharu, in the second line of his quadruplet, has given the characteristics of the Kshathriya type of trees:

Radha Kumud Mukherjea has written about it in a learned treatise. Even, after the rains stopped, the Petitioner did not attempt to sort out the matters. He has, as is usual in the case of such Petitioners and in such circumstances, referred to oral representations and personal meetings. Those averments have been refuted in the counter-affidavit. The averments of the Petitioner do not elicit any credibility at all in the circumstances.

The Gazette notification and the paper publications, could rightly attribute knowledge of the re-auction proposed on 19th January 1983. The Petitioner did not raise his little finger to protest against the action of the Department. He had knowledge about it, at any rate when the notice was received on 20th January 1983. He did not protest even then.

The re-auction had to be postponed in view of a post offer, as noted earlier. That re-auction admittedly was notified in the paper''s and the Gazette and intimated to the Petitioner, giving him an opportunity to deposit the balance amount within 7 clear days to avert the re-auction. That opportunity was admittedly not availed of. The auction was held on 21st April 1983. There was no demur. The Petitioner did not challenge that re-auction within a reasonable time. If the Petitioner had any contentions or complaints against the re-auction, the cause of action had clearly arisen on 21st April 1983. He came to this Court only on 31st October 1984, that is more than one year and six months after the accrual of the cause of action. He should have challenged the auction sale, within the conventional period of three months from the date. This is particularly so when he had been specifically posted with the knowledge of the re-auction by a communication in writing, in addition to the usual modes of publication in the Gazette and in the newspapers. His omission to timorously challenge the re-auction, disentitles him to any relief, on the ground of laches. It does not require a prodding by a further communication, for the Petitioner to challenge the re-auction and its results. He cannot adopt an attitude of utter unconcern, when a re-auction was notified to him. As a reasonable person, he should have made due enquiries about the same, and in time. That would have revealed the result of the re-auction and the liability that had been cast on him. If the liability is wrongly cast it was time enough to make an immediate challenge. An action of early 1983 cannot ordinarily be permitted to be challenged at a distance of time and in circumstances as obtaining in the present case and at the instance of a person like the Petitioner, who had no difficulty in availing of the profitable part of the transaction (relating to removal of teak timber, bid in the same auction) but belatedly attempted to sniff and sneer against Departmental action against him for in-excusable defaults on his part.

The mere fact that this Court directed under Ext. P-3, a representation to be made to the Chief Conservator of Forest and issued a further direction for disposing of the same, (without setting any time limit and which circumstance could be turned to the advantage of unscrupulous contractors as a result of the inseparable indolence in the office of the Chief Conservator of Forests as evident from the two year delay in the disposal of the representation) does not in any manner amount to a condonation of the laches on the part of the Petitioner. A disposal like Ext. P-3 cannot be interpreted to mean that the laches on the part of the Petitioner need not thereafter be looked into by this Court while exercising jurisdiction under Article 226 of the Constitution.

The reliance placed on the clause stipulating the conduct of the re-auction within 112 days of the default, is not one which has got any force or grace. The intimation of confirmation was sent to the Petitioner on 29th June 1982. He received it on 3rd July 1982. Therein he had been allowed a grace period of 52 days. He had therefore to remit the balance by 26th August 1982. The officers can extend the period by Anr. 30 days. That time expires only on 24th September 1982. The period of 112 days calculated from 26th September 1982 will extend upto 14th January 1983. The date actually notified was 19th January 1983. He did not protest against the re-auction at that time. The earliest possible time when he could have protested was on 28th December 1982 when the Gazette publication of the re-auction was notified. At least when the letter was received on 21st January 1983, he should have raised the protest. That was also not done. The clear laches on his part, in not contesting the further steps which the Government took at that time, cannot be ignored. The Petitioner, who was biding by the time, all the while and in a sly manner, cannot be permitted to defeat public interest by manipulative litigational exercises. The absence of a substantial grievance, and his continued in action even on the occasion of the second auction, only corroborate the impression of the court, that the Petitioner is not one who has a bona fide contention nor one with clean card. On that short ground, the writ petition is liable to be dismissed.

A general reference to some principles of the law relating to auction can be helpful in the context. In relation to an advertisement regarding auction, Bowen L.J., said in CarbeWs case:

Such advertisements are offers to negotiate-offers to receive otters-offers to chaffer.

An advertisement that specified goods will be sold by auction on a certain day does not constitute a promise to potential bidders that the sale will actually be held. (See Harri''s v. Nickerson (1873) L.R. 8 Q.B. 286).

An advertisement regarding auction can be with reserve or without. A Scottish court took the view that no agreement is complete unless and until the auctioneer acknowledges the acceptance of the bid by the fall of his hammer See Fenwick v. Macdonald, Fraser and Co. (1904) 6 F (Ct of Sess) 850. Benjamin''s Sale of Goods has dealt with ''sale without reserve'' in paragraph 145 of the 11th Edition (1981) of his Sale of Goods. A court dealing with the interpretation of the terms of a contract has a duty "to construe such documents fairly and broadly, without being too astute or subtle in finding defects...". The court can import terms from trade custom or from a previous course of dealing between the parties. This principle has been evolved for a good reason. "The courts strive to uphold rather than to destroy bargains which the parties believe-themselves concluded, and this is especially true in common dealings in a trade with which both parties are familiar".

As noted earlier, the files do indicate that even on so close a date as the expiry of the 52 days'' grace period, and the additional 30 days'' further grace period within the discretion of the authorities, large number of merchants have paid the balance amount and averted the reaction. There is therefore force in the contention of the department that a harmonious reading of the relevant provisions demonstrate the dominant intention as one giving a concession to the defaulter to salvage his bid if he be honest and diligent at least at a late hour. The provisions fixing a time of 112 days for the reaction cannot therefore be treated as wiping off a liability already incurred by the defaulting bidder as a result of the breach he had admittedly made in relation to the contract. For extinction or extinguishment of such liability legally and morally made out, stronger and more explicit terms are indispensable. Even on merits, therefore, the Petitioner does not have a strong case.

The Petitioner''s contentions have been considered on the hypothesis that the resale conditions which among Ors. insist on the re-auction to be held within 112 days, is inflexibly mandatory. The contention about its mandatory nature may, at first blush, appear to be attractive, particularly if the Clause 12(a) is read in isolation. A reading of the contract as a whole, and the provisions of Clause 12 in the background of the related provisions, would establish that the provisions are not mandatory. (The State attempted to expatiate that stand on the basis of principles and precedents in a counter-affidavit in the earlier writ petition.) This contention, put forward with great gusto, merits examination in a more detailed manner.

As noted earlier, in an auction sale, ordinarily, sale is completed with the falling of the hammer. This general provision may require variation when the goods, auctioned belongs to the Government. Run by human agencies of different attitudes and approaches, the institution of Government may require protection from its own protectors. Confirmation of a bid, by Anr. and higher agency is therefore specifically provided for in the conditions of auction sale, when Government proposes such auctions. Any reference to sales notification relating to abkari auction or forest auction, would bring about these facts. The sale then will be ordinarily completed only with the confirmation by the competent authority and the communication thereof. If the bidder does not make the deposit in accordance with the sale conditions, he commits a breach of contract. The Government would be entitled to recover the loss or damages'' arising from such a breach of contract. The measure of damages, subject to just exceptions, could be provided for in the sale conditions and agreed to between the parties. There is no dispute that in the present case, the amount of shortfall in the effective reaction, has been agreed to be treated as the correct measure of damages sustained by the Government. On the existence or quantum of the amount, there is no dispute.

The area of controversy is only in relation to the effect and impact of a failure on the part of the department in having the reaction within 112 days. It must be noted that this is a special provision giving a concession or advantage to the bidder. When the bidder is the defaulter, and guilty of breach of contract, he is bound to compensate the Government, for the damages suffered by his breach of contract. Clause 12 enables the contractor to avert a reaction by enabling him to deposit the balance amount on a later occasion. He thus gets the benefit of an added opportunity to effect the deposit and to have the advantages of the sale transaction. Such is the effect of the clause read as a whole. If there is greater delay in the actual holding of the auction, the bidder gets the added advantage of averting the sale by effecting a deposit within an additional period so available.

In some cases, time is the essence of contract. Not in all cases. Having regard to the auction scheme and the object of giving even a defaulting bidder a facility for fulfilling his part of the contract even by a belated deposit, the clause, could be treated only as directory and not mandatory, to adopt and adapt the usage in the interpretation of statutes. And in that view, the marginal delay cannot give rise to any cause of action for a defaulter like the Petitioner. The contention is totally devoid of force, judged from that point of view also. The finding so reached would result in an inevitable dismissal of the original petition.

In the light of the above discussion; the writ petition is dismissed. The manipulations attempted by the Petitioner should persuade the Court to award the costs so that the public exchequer can at least replenish partly, the substantial expenses involved in defending the case brought at the instance of a scheming forest contractor. The Petitioner will pay the costs of all the Respondents with Advocate fee of Rs. 500, payable, in separate set to each one of the Respondents.

The case is typical about the goings on in the Forest Department. As in the forest, so in the department, good species exist along with bad ones. One officer, fairly low in rank, was imaginative and intelligent to detect a design in the post offer made when the first reaction was held on 19th January 1983. The two offers received from outside the State, he rightly anticipated, were fraudulent in content, with the fraud effectively concealed. The department, however, has not been desirably vigilant in effectively protecting its interest'' either at the time when the earlier writ petition had been filed or for about two years after the filing of the present one. The records would indicate that on the earlier occasion, there was a careful study of the facts and files, at least at the stage of defence before this Court.

The case serves as a guide for the future about the general attitude of directing a consideration by the Government or other authority of a representation already filed or permitted to be filed later. That course serves to prevent a deflection of the course of justice, in cases where there has not been full collation of facts or comprehension of legal principles. If all material facts are available and the respective (opposing) stands are firmly taken, it is better not to procrastinate the difficult duty of decision making. Even in this very case, the deferring of a final judgment turned out to be only counterproductive. This Court''s disinclination to have an immediate adjudication of the controversy, in the light of the various aspects, would appear to have been of no advantage even to the Court in meaningfully reducing the tendency of cases. The case reappeared. It is possibly better to take the bull by its own horns. Duplication of a petition can, if at all, be advantageous only to those who intend to evade their legal obligations.

The Forest Department, in the emerging world of enlightened ideas, can no longer be treated as one fetching some revenue by exploitation of the timber and forest produce. In advanced countries, there are tree surgeons and tree engineers. See R v. King 1987 All E.R. 547. New responsibilities are therefore cast on the officials, many of whom toil hard, in difficult terrains and inconvenient surroundings. When the officials who are expected to be diligent become dull and deadening, public interest can suffer. To illustrate the point from the facts of this very case: the stipulation regarding the very short time (of 112 days) within which the reaction has to be held, had some inherent practical difficulties. They had been rightly realised even in 1984. Yet, no attempt Was made either by the Departmental Head or at the Governmental height, to effect an intelligent change in that provision. The attitude is well reflected in the old saying in the native language:

Drag, Drag, Drag on and lumber; It is Temple''s elephant and forest timber.

It is essentially for the Government to refurbish the image of the department by giving the right incentives to the industrious and intelligent among the officers, and to react fittingly to the erring ones. The phrase of Hegde, J. borrowed from the tree treatment, Union of India (UOI) Vs. Col. J.N. Sinha and Another, of chopping the dead wood for the healthy growth of the tree-is apt and apposite, in relation to the department-is the impression of a court which had opportunity to deal with very many varieties of forest litigation.