Andhra HC (Pre-Telangana)
M/S. A.P. Paper Mills Limited vs The Principal Secretary To Government, ... on 10 April, 1997
Equivalent citations: AIR1997AP257, 1997(3)ALT649, AIR 1997 ANDHRA PRADESH 257, (1998) 2 BANKCAS 472, (1997) 4 ANDHLD 467, (1997) 3 ANDH LT 649
Author: K.B. Siddappa
Bench: K.B. Siddappa
ORDER P. Venkatarama Reddy, J.
1. The petitioner-company challenges in this writ petition the Memo No. 23950/For.III/89-1, dated 18-10-1989 issued by the Principal Secretary to Government (Energy & Forests) informing the Principal Chief Conservator of Forests that the request of the petitioner-company to withdraw the demand raised by the Divisional Forest Officer was rejected. By his proceedings dated 16-1-1989, the Divisional Forest Officer, Rajahmundry demanded the payment of a sum of Rs. 25,18,413/-from the petitioner towards the value of 24,500 cum. of mixed hardwood allotted to the petitioner for the year 1987-88 on the ground that the petitioner-company failed to pay the amounts pursuant to the notice dated 4-3-1988 and 17-3-1988 and take possession of the hard wood allotted as per the terms and conditions of supply. The amount was arrived at by deducting from the amount of Rs. 40,82,915/- originally demanded, the sale proceeds of. Rs. 15,64,502/- realised in the auction held on 12-4-1988.
2. To put it in a nut-shell, the contention of the petitioner is that in the eye of law, the contract for the purchase of hardwood was not entered into at all by the petitioner and therefore the purported recovery of the amount under the terms of a, non-existing contract is arbitrary and without authority of law. The re-auction of hardwood on the footing that the property in the material once passed to the petitioner-company and on its default to take possession, reverted back to the Forest Department -- is also assailed as a fiction without factual basis.
3. Though, at first blush, we felt that the issue centre round an alleged contract and could be more appropriately decided in a civil suit, on a deeper consideration, we felt that the relief under Art. 226 of the Constitution ought not to be denied to the petitioner on that ground. Having regard to the contention of the petitioner that the company is sought to be saddled with a liability on the basis of an inconclusive contract and the respondents are bent upon realising the alleged dues under the Revenue Recovery Act, we thought it just and proper to adjudicate whether the purported action is arbitrary, without the need to go into any disputed facts. The fact that the writ petition was admitted more than seven years back and kept pending all these years is another consideration that weighed with us in resolving this dispute in exercise of our jurisdiction under Art. 226 of the Constitution.
4. In order to appreciate the points arising for our decision, it is necessary to refer to the admitted correspondence between the parties in chronogogical order. At the outset, we may clarify that it is common ground that there is no formal written contract between the parties.
5. The petitioner is running a paper industry having its factory at Rajahmundry. Hardwood is one of the raw materials required for the manufacture of paper. The Principal Chief Conservator of Forests, by his letter dated 23-6-1987, informed the, petitioner that mixed hardwood required by the company for the year 1987-88 will be supplied by sale of 40,000 M.T. from Rajahmundry and 15,000 M,T. from Guntur before 31-3-1988. The petitioner was asked to approach the Conservators of Forests, Rajahmundry and Guntur for further details of areas of supply, etc. It is indicated in the letter that the Forest Department will extract the material departmentally and supply the same in stacks of specified sizes. As soon as the material was ready for handing over in any strip of any coupe, a notice will be sent to the company by the Divisional Forest Officer concerned and the material will be handed over to the Company's representative at the coupe on" payment of royalty and other amounts due for the material. It is then stated in the letter that "the company shall take possession of the material within ten days from the date of intimation and lift the material allotted within 45 days of allotment of such material." It is further stated-- "However in respect of all wood allotted before 31-3-1988, the company shall pay the royalty and take charge of the material before 31-3-1988. The last instalment of wood allotted could be lifted before the end of April, 1988". It is then stipulated:-- "On failure to take possession or to remove the material within the time allowed, the material will revert back to the Department and will count towards the supplies for the year 1987-88. The material will be sold in public auction at the risk and loss of the company. Still the company have the obligation to pay the sale value of the material". In paragraph 4 of the letter, it was stated that the company will be charged at Rs. 269.17 per ton of wood plus extraction and other charges up to the point of delivery and also the taxes due. This amount will be required to be paid by the company within 10 days from the date of intimation of supply. The company shall take possession of the material and lift it as stipulated after making payment. The petitioner was requested to report within ten days whether it was willing to avail of the allotment or not.
6. Pursuant to the above letter the petitioner addressed the Conservator of Forests on 1-7-1987 to inform the names of the coupes from where the supplies will be made and the approximate monthly quantities to be delivered. By another letter dated 19-8-1987 the petitioner informed the Conservator of Forests, Guntur that the company was not interested in buying hardwood from Guntur Circle. The Conservator of Forests (R-3) then wrote to the Divisional Forest Officer, Rajahmundry to allot mixed hardwoods to the petitioner company from 5 coupes mentioned therein and to submit the agreement for approval. The proposal for collecting overhead charges at Rs. 27.21 per cum and sales tax at Rs.6/- per CUM were approved. Thereafter, the Divisional Forest Officer (R-4) informed the petitioner by letter dt/-9-2-1988 that the Consenator of Forests (R-3) allotted mixed hardwood of 24,500 m3 expected to be obtained from five coupes --the names of which were given, A draft agreement was sent along with the letter and the petitioner was asked to enter into an agreement by 15-2-1988. The attention of the petitioner was drawn to condition No. 8 of the Agreement under which an amount of Rs. 1,47,000/- was to be paid as security deposit. The petitioner was asked to produce the challan on or before 12-2-1988 positively. In reply to the above letter, the petitioner addressed a letter on 12-2-1988 to the Divisional Forest Officer stating that the draft agreement for the supply of mixed hard-wood has not yet been finalised by the Government, The DFO was therefore requested to arrange for the supply of mixed hard-woods, "as usual, in view of the allotment letter to the Principal CCF without insisting on the execution of the agreement". Tt was also pointed out in the said letter that the amount of security deposit demanded was on the high side and the petitioner suggested that the security deposit of Rs. 25,000/- may be accepted as the quantity alloted was only 24,500 cmt. The petitioner then submitted that sales tax was not payable on royalty as per the decision of the High Court. Regarding payment of extraction and over-head charges, it was pointed out that the proposed rate of Rs. 27.21 per cmt. was very much on the high side and probably the word 'cmt.' was a typing error. The D.F.O. was asked to confirm that Rs. 28/-per stack only would be charged. In the last para, the petitioner requested that having regard to the fact that the last date of transportation was up to 30-4-1988, the Department may raise the last demand up to 15th March, 1988 only and in the meanwhile to raise the demand, for the quantity already available at the earliest. Referring to the above letter of the petitioner, the DFO sent a reply on 15-2-1988 stating that if the company was not willing to execute the Agreement, at least, an undertaking should be given to the effect that in case of any dispute, they would abide by the decisions of Respondents 2 and 3, It was made clear that on the strength of such undertaking only, the supply can be made. The DFO maintained that the security deposit of Rs. 1.47 lakhs was quite reasonable. The petitioner was asked to remit the said amount by 17-2-1988. The Divisional forest Officer also clarified that there was no typing error in mentioning the rate at Rs. 27.21 per one cubic metre and that the said rate was only approved by the 3rd respondent. Regarding payment of sales lax, the DFO stated that it will be included in the demand as usual till the decision is taken by the Government. The petitioner replied to that letter on I9-2-I988. The petitioner agreed to submit an undertaking to abide by the decision of Conservator of Forests and Principal CCF in case of any dispute and in view of this undertaking the DFO was requested not to insist upon security deposit as the due amounts were going to be paid in advance for the quantities allotted and the allotment being made at the end of the year. As regards the extraction and over-head charges, the petitioner once again requested for reduction. The petitioner concluded the letter as follows :--
"We hope your good self would be kind enough to consider our above request and issue favourable orders at the earliest at the time limit for removal of material for the current year is 30-4-1988 only and as 45 days arc allowed for depositing the amount, taking the delivery and transporting the material, the last demand is to be raised up to 15-3-1988 only."
On 1-3-1988, the Conservator of Forests informed the Divisional Forest Officer that his proposal for collecting extraction and over-head charges at Rs. 18.40 per cmt. The DFO was requested to take immediate action to allot the hardwoods to petitioner. A copy thereof was marked to the petitioner. After this letter was received, the petitioner again entered into correspondence with regard to the quantum of extraction and over-head charges. The Conservator of Forests was requested to evolve a formula on the lines suggested by the Company. The petitioner once again requested for the review of the decision as regards the amount of security deposit On 3-3-1988 the Conservator of Forests addressed a letter to the petitioner reiterating the earlier decision taken with regard to extraction and other charges as well as the security-deposit.
7. While so, on 4-3-1988 i.e. the day succeeding the letter sent by the Conservator of Forests, the DFO sent a letter of allotment and demanded a sum of Rs. 16,66,496/.This is what the letter reads:--
"Subject to the conditions laid down in the Prl. Chief Conservator of Forests reference cited and other conditions followed during previous years and also payment of security deposit of Rs. 24,500/- by the A.P.P. Mills the following quantities of mixed hardwoods from the coupes noted against each are allotted to the A.P.P. Mills as a part of the quota by the Prl. Chief Conservator of Forests in the reference 2nd cited.
Sl. No. Name of the Coupe Quantity allotted now
1. Pinjarikonda TCWC.
II/87-88 2350 m3
2. Parisivalasa TCWC.
II/87-88 2690 m3
3. Antilova Spl. TCWC.
II/87-88 1200m3
4. Dummukonda TCWC.
I/87-88 3760 m3 Total 10000 m3 It is therefore, requested to pay the amount of Rs. 16,66,496.20 ps. as per demand notice enclosed within 10 days of issue of this demand notice and take possession of the material."
8. On 12-3-1988, the petitioner addressed a letter to the Conservator of Forests with a copy marked to the DFO stating that Mukhaddams working in the Forest areas were on indefinite strike from 26-2-1988 and it would not be possible for the company to transport the quantities of hardwood alloted to them from various coupes till the strike was called off. The petitioner, therefore, requested him to allow three months lime for transportation of 25,000 cmt. of hardwoods from the date the strike was called off. The petitioner, however, assured that the amounts as per the demands will be deposited from time to time. The Conservator of Forests addressed a letter to the Prl. CCF with copies marked to the petitioner and DFO drawing his attention to the represemation made by the petitioner and recommending for extension of time for lifting the material up to 15-5-1988. Notwithstanding this, the DFO lost no time in allotting a further quantity of 14,500 m3 from five coupes and demanding a sum of Rupees 24,16,419/-. It is to be mentioned that the quantity so allotted includes a part of the material allotted in 1st instalment (i.e. on 4-3-88). Such overlapping allotment was made on the footing that the material not taken possession of revested with the State. On the same day, an order was passed by the DFO directing that 10000 m3 which was not paid for and taken possession of by the petitioner before 14-3-1988 reverted to the Forest Department and it will be sold in public auction at the risk and loss of the petitioners. It was stated in the said order that as per the terms and conditions of supply, the amount as per the demand had to be paid within 10 days, but the petitioner expressed its inability to pay the amount until the orders giving extension of time were received. The time sought for was said to be abnormal. The petitioner was also called upon to remit the amount of Rs. 16,66,496/-as per the demand notice urgently and produce the challans. The petitioner addressed a letter on the same day to the DFO requesting him to await the final orders from the Principal CCF regarding extension of time sought for. However, the Conservator of Forests, who recommended the petitioner's request for extention of time sent a communication dt/-23-3-1988 that the request of the petitioner was rejected "pending receipt of orders from the Prl. CCF". The petitioner was requested to take possession of the material urgently after paying all the amounts. On the same day i.e., 23-3-1988, the DFO issued a sale notice proposing to sell in open auction the fuel-wood indicated in the notice which includes the quantity allotted to the petitioner earlier. The petitioner in its letter dt/- 24-3-1988 once again requested the Conservator of Forests to grant time of at least 45 days from the date the strike is called off. It was brought to his notice that the problem of strike could not be solved in spite of their best efforts. The Conservator of Forests rejected the request on the very next day. On 28-3-1988, an order similar to the one passed on 17-3-1988 in relation to 10000 cmt. was passed with reference to the balance quantity of 14500 m3 allotted on 14-3-1988. The DFO reiterated the stand that the property in the material reverted back to the Forest department and the department was free to dispose it of in public auction at the risk and loss of the petitioner-company. The petitioner was, however, given an opportunity to pay the amount of Rs. 24,16,419/- at an early date. As the petitioner did not respond by remitting the amount demanded, the hardwood was auctioned oh 12-4-1988 and 26-4-1988. A final demand notice was issued on 16-1-1989 demanding the balance amount of Rs. 25,18,413/- after deducting the sale proceeds realised in the auctions. The petitioner then made unsuccessful representations to the respondents 1 to 3 and after the impugned order dt/-18-10-1989 was received from the 1st respondent, the present writ petition was filed apprehending that coercive steps will be taken by the department for realising the amount of Rs. 25 lakhs and odd.
9. The first and foremost contention raised by the learned counsel for the petitioner is that there was no concluded contract between the parties as there was neither specific nor implied acceptance of the terms and conditions stipulated by the Forest Department and therefore, the question of fastening liability on the petitioner for the value of hardwood which never became the property of the petitioner does not arise. It is contended that the transaction did not proceed beyond the stage of offers and counteroffers. There was therefore no legal basis for enforcing the following stipulation in the "allotment order" issued by the Principal Chief Conservator on 23-6-1987 :--
"On failure to take possession or to remove the material within the time allowed, the material will revert back to the Department and..... will be sold in public auction at the risk and loss of the company. Still the company have the obligation to pay the sale value of the material".
10. The stand taken in the counter-affidavit filed by the Conservator of Forests is that there was "a negotiated settlement and agreement" between the department and the petitioner regarding allotment of mixed hardwoods. The petitioner-company accepted the allotment orders issued by the Prl. C.C.F. and requested the Conservator of Forests to indicate the areas. The DFO intimated about the areas and the intimation was acknowledged by the petitioner's representative. It is submitted that the petitioner request to the Conservator of Forests to indicate the areas from where the quantity will be supplied would itself indicate that the company agreed to the allotment order issued by the Prl. CCF. It is also pointed out that the petitioner made a bargain with the Conservator of Forests and the Divisional Forest Officer and succeeded in getting the reduction in the rate of overhead charges and also the security deposit. The requirement as to execution of formal agreement was also relaxed at the instance of the petitioner. All this indicated, according to the respondents, that there was firm acceptance of the offer made by the respondents and both parties proceeded on the basis that a contract had come into existence. The learned Government Pleader has reiterated the stand taken in the counter and submitted that the petitioner merely tried to cover up its default in paying for the material within 10 days of the receipt of information by taking a belated stand that there was no contract under which the company was bound. It is submitted that the contract can be inferred or from correspondence though there is no formal agreement.
We are unable to accept the contention of the learned counsel for the petitioner that there was no concluded contract at all and that the petitioner is not bound by any stipulation contained in the allotment order dt/-23-6-1987. At any rate, the conduct of the petitioner, in our view, disentitles it to discover a new plea to wriggle out of the contractual obligations. In exercise of our discretionary jurisdiction under Art. 226, we are not inclined to allow the petitioner to take shelter under such plea. The allotment letter dt. 23-6-1987 is the broad frame-work within which the contract between the parties took final shape and the mutual rights and obligations ultimately crystalized. True, the petitioner did not unreservedly accept some of the terms stipulated in the allotment letter as well as in the subsequent letter issued by the Divisional Forest Officer. The petitioner went on corresponding with the department for reduction in the rate of extraction and overhead charges and the quantum of security deposit and also with regard to execution of formal agreement. Thus, no doubt, there was an offer and counter-offer. But, the fact remains that to a substantial extent, the petitioner succeeded in persuading the department to agree for more favourable terms as to price, security deposit etc. Thereafter, the firm offer pursuant to the allotment letter dt/-23-6-1987 emanated from the respondents side by the DFO allotting 10,000 mts of bamboos on 4-3-1988 on the revised terms. The question is whether this offer coupled with the offer contained in the allotment letter dt. 23-6-1987 was or must be deemed to have been accepted by the petitioner or not. In this context, the most important communication to be taken note of is the one addressed by the petitioner to the Conservator of Forests (copy marked to the DFO) on 12-3-1988 i.e., a week after the 10000 m3 of hardwood from five coupes was allotted by the DFO on 4-3-1988. In that letter which is very crucial, the petitioner while requesting three months time for transportation of 25,000 of CMt of hardwood stated in categorical terms. "We shall however deposit the amounts as per demand raised from time to time". It is worthy of note that the petitioner which had entered into a protracted correspondence for the revision of certain terms did no longer raise any question as regards the material terms of the contract. The only request made was to allow three months' time to lift the material. The letter dt. 12-3-1988 far from declining or backing out from the firm offer made by the Forest Department, affirmed and recognised trie culmination of the contract. The mere fact that three months' time was sought for lifting the material does not mean that the petitioner did not accept the offer of allotment. The petitioner, on the other hand, categorically assured the forest authorities that the amount will be deposited as per the demands raised. The petitioner could have very well deposited the amount of Rs. 16.66 lakhs demanded by the DFO in his letter dt/-4-3-1988 and availed of the extra time for lifting the material from the depots or coupes. Paying the demanded amount and taking symbolic delivery of the material is one thing and taking physical delivery and removing material is another thing. Merely because the time was sought for the latter operation, it does not lead to the inference that the petitioner did not accept or abide by the offer unless and until three months' time was granted for lifting the material. The very fact that the petitioner promised to pay the amount as per the demand means that he accepted the offer and proceeded on the basis that the contract was concluded for all practical purposes. But, the petitioner did not keep up its promise of paying the amount as per the demand in spite of the opportunity given by the D.F.O. even after the auction notice was issued. If the petitioner did not want to pay the amount and take delivery of hardwood unless and until the requested time was granted by the Department, the petitioner should have expressly said so and refused the offer in categorical terms. If the petitioner paid the amount as per the Demand and also as per its own undertaking, there is no reason to think that the extra time sought for to lift the material would have been refused by the Forest authorities. The conduct of the petitioner in not depositing the amount despite its categorical assurance is inexplicable.
Having regard to the facts and circumstances noted above, the 'risk and cost' clause contained in the allotment order dated 23-6-1987 comes into play and the petitioner is bound by the same. Even assuming that the property in the hardwood did not pass to the petitioner for the reason that there was no appropriation of the goods to the contract and there was no 'reversion' to the Department, still there is no legal bar for the operation of the clause that the material shall be sold in public auction at the risk and cost of the company.
The learned counsel for the petitioner relied on the decision of the Supreme Court in Badri Prasad v. State of Madhya Pradesh, AIR 1970 SC 706. In that case the Divisional Forest Officer wrote a letter to the plaintiff whether he was ready to pay a further sum of Rs. 17,000/- for awarding "the contract of big trees". The plaintiff was asked to express his desire within 7 days and if no reply was received, it would be presumed that he was not acceptable for mutual compromise. The plaintiff replied that he was ready to pay Rs. 17,000/- provided his claim to have the refund of Rs, 17,000/- already paid, from the owner of the Village or any other relief consequential to the judgment remained unaffected. Subject to those conditions, the plaintiff informed the DFO that he was ready to pay Rs. 17,000/-. The Supreme Court held that no contract was concluded between the Government and the plaintiff. The Supreme Court expressed a doubt whether the letter addressed by the DFO was in the nature of an offer. Assuming it to be so, their Lordships held that the alleged acceptance of the offer being conditional and qualified no contract resulted. In the present case, the tenor of correspondence (referred to supra in detail) and the factual situation is cntirely.different. That case affords no parallel to the case on hand.
The learned counsel for the petitioner then relied on the decision in State of Madhya Pradesh v. Firm Gobardhan Dass, . In that case, the respondent firm submitted its tender for the purchase of certain forest products. The tender being highest was accepted for an on behalf of the Chief Conservator. However, the tender was subject to the conditions of sale notified in the tender notice. One of the conditions was that the tenderer had to deposit on the spot 25 per cent of the purchase price as the initial deposit and the final bid, if accepted, had to be sanctioned by the Chief Conservator at the spot. The balance 75 per cent had to be paid within one month from the date of purchase. If the tenderer failed to pay the balance of 75 per cent, the State would be entitled to forfeit and to resell the goods and recover the deficit from the purchaser. The Supreme Court held that there was no proof to show that the Chief Conservator had accorded sanction in writing. Moreover, in the absence of initial deposit of 25 per cent of the purchase price having been made on the spot, the tenders could not be validly accepted nor sanctioned by the Chief Conservator. Neither the conditions of sale nor the Rules provided for waiving the condition of having to make the initial deposit of 25 per cent on the spot or for extending the time for making such initial deposit. In those circumstances, the Supreme Court held (paras 9 and 11):
"The true position, therefore, was that the offering of the said tenders by the respondent firm and their purported acceptance by the Forest authorities never ripened into a concluded contract.
The initial deposit not having been made according to condition 5 to which acceptance of the tender was subject, the purported acceptance was not a valid one, there was no concluded contract."
We do not think that this decision comes to the aid of the petitioner. In that case, there was an embargo against the acceptance of the tender unless-the initial deposit of 25% was made on the spot. The Chief Conservator had no authority to waive that condition. In those circumstances, their lordships of the Supreme Court held that there was no concluded contract. It is difficult to understand how the ratio of this decision could fit into the facts of the present case. The learned counsel for the petitioner endeavoured to draw the analogy from the facts of that case by contending that until and unless the security deposit was paid, a concluded contract could not come into existence. We do not think that the emergence of contract is linked up with the payment of security deposit. It cannot be said that there could be no acceptance in law without the payment of security deposit. Security deposit could have been paid before taking delivery of the goods, if the Forest Officer so insisted or even thereafter within the time allowed by him. There was no hard and fast rule in this regard as was the case with regard to the initial deposit of 25% in the case decided by the Supreme Court.
The learned counsel for the petitioner further relied on the decision of the Supreme Court in P.S.N.S. Ambalavana Chettiar & Co. v. Express Newspapers, . In that case the Supreme Court while pointing that the seller can claim as damages the difference between the contract price and the amount realised on resale of the goods where he had the right of resale under Sec. 54(2) of the Sale of Goods Act observed that the seller has no right of resale under Sec. 54(2) where the property in the goods has not passed to the buyer. The Supreme Court then went into the question whether the property in the unascertained goods got transferred to the buyer in the light of the Sec. 18 of the Sale of Goods Act. We are not here concerned with the question of statutory right of resale nor is it necessary for us to deal with the question whether the property passed to the petitioner. As already observed by us, even assuming that the property did not pass and there was no occassion for resale, the Clause in the contract which provides for auction of the goods at the risk and cost of the allottee can still come into play.
The learned counsel for the petitioner also endeavoured to bring the situation caused by the labours strike under the doctrine of frustration. We are not inclined to allow the petitioner to raise this plea which turns ori an investigation into facts in this writ proceeding under Art, 226. Suffice it to observe that on facts, prima facie, there is no scope to apply the doctrine of frustration.
The next question which still remains for consideration is whether the petitioner should be saddled with liability to pay the differential value for the quantity of 14500 m3 allotted by the Divisional Forest Officer by his letter dated 17-3-1988. This letter is on similar lines as the earlier letter dt/-4-3-1988 in which 10000 m3 was allotted. By this letter, the petitioner was required to pay an amount of Rs. 24,16,419,'- towards the price of 14,500 m3. As the petitioner did not avail of the offer and failed to take delivery of the material, the quantity of 14,500 m3 was auctioned together with the quantity allotted earlier. We are of the view that the failure of the petitioner to pay the amount demanded and take delivery of 14,500 m3 does not stand on the same footing as the earlier allotment. We are inclined to think that there is a material difference between the two transactions and the liability cannot be fastened on the petitioner for the alleged failure to take delivery of 14500 m3. First of all, the letter from the petitioner which followed the allotment of 14500 m3 did not spell out any commitment to deposit the amount as per the demand as was found in the petitioner's letter dated 12-3-1988. The petitioner in its letter dated 19-3-1988 while reiterating the request for allowing three months time for transporting the material, requested the D. P.O. to await the final orders from the Prl. Chief Conservator of Forests regarding the extension of time. It cannot, therefore, be said that the offer made by the D.F.O. was unconditionally accepted. That apart, we are of the view that the 4th respondent acted arbitrarily and unreasonably in allotting a further quantity of 14500 m3 when the petitioner already expressed its-inability to perform the contract unless sufficient time was granted for lifting the material after the labour strike was called off. In the face of the petitioner's letter dated 12-3-1988 and the processing of the petitioner's request for extension of time at the third respondent's level, no further offer/allotment of hardwood should have been in all fairness, made to the petitioner The action of the 4th respondent, who primarily derives his powers and perform the duties under the provisions of the A.P. Forest Act and the Rules does not remain in the realm of private law only. It has the flavour of public law element and it has to satisfy the standards by which an executive action can be tested under Article 216. It follows, therefore, that his action must be informed by rationality and reasonableness. We are of the view that the 4th respondent's move to allot a further quantity of 14500 m3 even after sensing the inability of the petitioner to take delivery of the material must be condemned as an instance of arbitrary and unreasonable, exercise of power. The additional quantity should not have been thrust on the petitioner at that juncture.
In the light of the above discussion, the writ petition is to be partly allowed. The respondents shall be restrained from collecting any amount in connection with the allotment of 14500 m3 as per the 4th respondent's letter dated 17-3-1988. However, the amount of Rs. 16,66,496/- which is due as per the first allotment can be collected from the petitioner after giving credit to the proportionate sale price fetched in the auction. We, therefore, direct that the final demand notice sent by the 4th respondent through his proceedings Re. No.4555/87/A8, dated 16-1-1989 should be suitably revised. The impugned order of the 1st respondent dated 18-10-1989 confirming the demands raised by the D.F.O. is accordingly quashed to the extent indicated above.
We make no order as to costs.
11. Order accordingly.