Allahabad High Court
Shafiullah vs State Of Uttar Pradesh And Ors. on 26 October, 1960
Equivalent citations: AIR1961ALL485
ORDER J.K. Tandon, J.
1. The above petition has contained more than one relief and also a number of facts but in view of the fact that the relief asked is now confined to the prayer that the respondents be debarred from proceeding to realise the sum of Rs. 1,500/- from the petitioner as arrears of land revenue, I shall state such of them only as bear on the question.
2. The petitioner is a forest contractor. The respondents are the State of Uttar Pradesh, the Chief Conservator of Forests, U.P., the Conser-
vator of Forests, U.P., Eastern Circle and the Divisional Forest Officer, Bahraich Division. The Divisional Forest Officer sold by auction the right to remove timber from lot No. 2 in compartment No. 21 (c) in Motipur Block in the Bahraich Division on the 21st August, 1958. The petitioner having offered the highest bid of Rs. 15,000/- the same was knocked down in his favour.
In accordance with the conditions governing the sale the petitioner also deposited a- sum ot Rs. 1,500/-, being 10 per cent of the sale price as security deposit. After the sale had been knocked down and the security deposit also made, a controversy arose between him and the Forest Department about the correctness etc. of the announcement describing the property sold as according to the former an incorrect description had been given, i.e. the size etc. of the trees on the spot was not in accordance with the specifications.
The petitioner has produced copies of the correspondence started between him and the Forest Department in this regard. It is not necessary to refer to it in detail but suffice it to mention that the position taken by him was that in so far as the property offered for sale was not of the description published he was entitled to withdraw from the contract. This he did by his letter dated the 5th of September, 1958 (Annexure 3). The following quotation from it will be useful:
"In general auction held on 21-8-1958 I purchased Lot No. 2, Compartment No. 21 C and plot No. 1 of Nishangarh Range for Rs. 15,000/-for which I deposited Rs. 1,500/- towards its security. In this connection I beg to say that when I went to the spot I found the position of the lot otherwise than the position given in the Sale notice. Besides the marking of the trees is also incorrect and the allotment of Sleepers is much above than the produce.
"Therefore, under the above circumstances I would request that the sale price of the lot may kindly be reduced and the allotment of sleepers may be cancelled. In case your honour is not prepared to do, this application may be treated as an intimation that I shall no longer have any concern with this lot and my security of Rs. 1,500 may be refunded to me''.
Three days later the Divisional Forest Officer sent tho following reply:
"Before your resignation is accepted you will have to deposit 20 per cent security which will be confiscated and besides this if after re-auction there is difference in the sale price, you will have to make good the loss.
"You are therefore warned to start the word after you are asked to do so otherwise necessary action under rules will be taken against you. Please note carefully".
The controversy continued and ultimately on the 17th of October, 1958 the petitioner sent, what he has claimed to be, an unconditional resignation from the contract asking at the same time the amount of Rs. 1,500/- deposited by him to be refunded. On the 24th October, 1958, the Conservator wrote back to him expressing his inability to concede to his demand. The following letter, a copy whereof is Annexure 11, in the above connection is again material.
"Kindly refer to para 1 of this office letter No. 12875/KC/66-BKCH/1958, dated October 24, 195S, in which I have expressed my inability to reduce the sale price.
"2. Since you want to resign from the lot your case falls under the heading (Tyag Pattra Ke Niyam) of the General Sale Rules and action is being taken accordingly".
The material part of this document is paragraph 2 wherein the petitioner had been warned that in view of his resignation his case shall fall under the heading (Tyag Pattra Ke Niyam) of the Genera! Sale Rules according to which action would he taken against him. On November 29, 1959, soon after the Divisional Forest Officer wrote to the petitioner that his resignation had been accepted under the General Sale Rules. He was further told that he had deposited Rs. 1,500/-only as security and that it was necessary for him to deposit another Rs. 1,500/- to complete the 20 per cent of the sale price.
3. The amount of Rs. 1,500/- which the respondents are seeking to realise from the petitioner as arrears of land revenue is the balance of 20 per cent on payment of which the resignation was liable to be accepted after deducting the security deposit initially made by the petitioner. .
4. In order that the controversy may be fully appreciated, condition 15 of the General Conditions on which the respondents apparently acted will need to be looked at. According to it the Conservator is empowered to accept the resignation of a contractor from any contract made by him on the latter fulfilling certain conditions. One of these conditions is that the contractor shall have to deposit 20 per cent of the sale price inclusive of any security already deposited by him as a condition precedent to the acceptance of his resignation.
It was in the above context that the respondents required the petitioner--in fact the warned him also in that behalf--to deposit 20 per cent of the price to enable his resignation to be accepted. The petitioner who disowned the purchase made by him on several grounds, as earlier stated, declined to make this deposit. Since 10 per cent of the amount had been deposited as initial security the further sum of Rs. 1,500/- which is being realised from him as an arrear of land revenue is the balance that would be payable by him under the above condition.
5. The objection which he has taken against) the said recovery from him is that while the Conservator of Forests has the power to accept resignation on the contractor agreeing to pay and paying also 20 per cent of the sale price, he has no authority to compel the same to be paid. In other words, it is the option of the contractor to pay the amount and not the right of the Forest Department to compel the payment to be made. In this manner the petitioner's contention is that the demand of Rs. 1,5007- imposed upon Mm and sought to be realised from him as an arrear of land revenue is not warranted by the contract Or the law.
6. Ordinarily this Court will refuse to intervene under Article 226 of the Constitution in a matter which in final analysis has to interpret a contract arrived at between the parties and give relief upon it. The proper forum for such disputes to be settled is the agency of regular courts, but where, as in the instant case, the State decides to employ coercive process of recovering the amount considered to be payable to it as an arrear of land revenue the Court will not hesitate to intervene if upon the facts accepted or established the amount sought to be recovered is not payable to it even though the terms of the contract have to be construed. The extra reason is the employment by the State of the extra-ordinary power to make the recovery as an arrear of land revenue which, as everyone is aware, cannot be resisted except on very limited grounds.
7. The true effect of condition 15 will thus require to be judged. The learned Standing Counsel has further relied on paragraph 3 of the contract entered into by the petitioner. According to it the State is entitled, in the event of the contractor not beginning his work before the 1st of December following the date of sale or of not prosecuting the work in right earnest or if he notifies his repudiation of the contract, to cancel the contract and confiscate the security money and all or any other moneys already paid by or on behalf of the buyer and if the security and other moneys so forfeited are less than the sale price to realise the remainder also from him. This provision is subject to the condition that if the forest produce is resold within a specified period of the cancellation of the contract the contractor shall be given benefit of the resale price.
8. It is contended that the above term of the contract entitled the State Government to recover upto Rs. 15,000/- from the petitioner so that the amount of Rs. 1,500/- for which the coercive process has been taken is indeed payable to it. I do not think it is necessary for us in this petition to interpret the true effect of paragraph 3 above for the reason alone that the amount of Rs. 1,500/- which is being realised has not been demanded or imposed under its provisions.
Whether the State has or has not the right to enforce payment by the contractor upto the value of the contract and whether the contract was indeed binding upon him or not are matters on which I shall refrain from expressing any opinion. The rights of the parties under it also will remain unaffected by this decision. Presently I am concerned with condition 15 only of the General Conditions of Sale under which the imposition of Rs. 1500/- is inflicted and is sought to be recovered.
The above condition as its language clearly bears out gives a right to the contractor to resign from a contract provided he previously deposits 20 per cent inclusive of the security already deposited of the sale price. The Conservator has no power under its provisions to compel the contractor that he must pay the amount, Or accept the resignation without the amount being previously paid. According to its terms the resignation is infructuous until the condition of 20 per cent deposit is fulfilled.
The power of the State to treat the contract as cancelled etc. belongs under paragraph 3 to which tho learned Standing Counsel has referred but this paragraph does not entitle the State to demand any additional security as contemplated in condition 15. The order of the Conservator demanding this amount from the contractor because he resigned from the contract is not warranted by either provision. That being so, the proceedings started against him for realising the amount as an arrear of laud revenue are the result of an erroneous view of those provisions and the petitioner is entitled to ask this Court to require the respondents to desist from realising the same as an arrear of land revenue.
9. Side by side with the order for recovery of Rs. 1,500/- as arrears of land revenue, the petitioner has also been black-listed meaning thereby that he cannot in future be considered to take contracts from the Department. The petitioner wants that this part also of the order should be quashed. Blacklisting is a purely internal matter of the Department. Besides blacklisting can be done on a number of considerations and an order in that behalf will not be unwarranted where a contractor unreasonably gets out of the contract made by him. Annexure 2(1) dated the 8th of July, 1959 shows that the Department took the action of cancelling the contract as well in his case. It is not possible under the circumstances to say that the blacklisting was done for failure by him to pay Rs. 1,500/-demanded from him. For the above reason too I do not think he is entitled to ask an order quashing the blacklisting made in his case.
10. In the result, therefore, this petition succeeds to this extent only that the respondents are directed not to proceed to realise the amount of Rs. 1,500/- as an arrear of land revenue from the Petitioner. No order is made as to costs.