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"10. What was said in these cases with respect to Section 175(3) of the Government of India Act. 1935, applies with equal force to Article 299(1) of the Constitution. Two consequences follow from these decisions. The first is that In view of Article 299(1) there can be no implied contract between the Government and another person, the reason being that if such Implied contracts between the Government and another person were allowed, they would in effect make Article 299(1) useless, for then a person who had a contract with Government which was not executed at all in the manner provided in Article 299(1) could get away by saying that an implied contract may be inferred on the facts and circumstances of a particular case. This is of course not to say that if there is a valid contract as envisaged by Article 299(1), there may not be implications arising out of such a contract. The second consequence which follows from these decisions is that if the contract between Government and another person is not in full compliance with Article 299(1) it would be no contract at all and could not be enforced either by the Government or by the other person as a contract. In the present case it is not in dispute that there never was a contract as required by Article 299(1) of the Constitution. Nor can the fact that the appellant bid at the auction and signed the bid-sheet at the close thereof or signed the declaration necessary before he could bid at the auction amount to a contract between him and the Government satisfying all the conditions of Article 299(1). The position therefore is that there was no contract between the appellant and the Government before he bid at the auction nor was there any contract between hjm and the government after the auction was over_as required by Article 299(1) of the Constitution. Further in view of the mandatory terms of Article 299(1) no implied contract could be spelled out between the Government and the appellant at the stage of bidding for Article 299 in effect rules out all implied contract between Government and another person. The view taken by the High Court that Section 155(b) of the Madhya Pradesh Land Revenue Code which provides for recovery of money as arrears of land revenue would therefore ensure in favour of the Government and enable it to recover the deficiency cannot be sustained. That clause provides for recovery of all moneys falling due to the State Government under any grant, lease or contract and says that they shall be recoverable in the same manner as arrears of land revenue. The High Court was of the view that the word "contract" in this clause includes an implied contract between the Government and another person in view of the mandatory provision of Article 299(1) of the Constitution there can be no question of recovery of any money under an implied contract under Clause (b) of Section 155. The view therefore taken by the High Court that this amount could be recovered under Section 155(b) is not correct."
"A reading of Section 82 goes to show that all moneys other than fines payable to the State Government under the terms of a notice relating to the sale of timber or other forest produce by auction or by invitation of tenders issued by or under the authority of a Forest Officer may, if not paid when due, be recovered under the law for the time being in force as if it were an arrear of land revenue. Before Section 82 can be applied, it has to be seen whether the amount of deficiency which is being recovered from the petitioner is due under the terms of the notice relating to the sale of forest produce by auction issued by or under the authority of a Forest Officer. We have already stated that the auction of mahua flowers in which the petitioner was the highest bidder in respect of nine lots was conducted under the terms of notice (Annexure-A) which also contains the terms and conditions of auction. This notice was issued by the Divisional Forest Officer. Conditions Nos. 11. 12 and 13 of this notice are material. We have already noticed that condition No. 11 provides that a successful bidder will have to deposit 25% of the sale price offered immediately after the completion of the auction. Condition No. 12 provides, that the balance of the offered price should be deposited within seven days of the acceptance of the bid. Condition No. 13 provides that in case of breach of conditions Nos. 11 and 12 the lot would be re-auctioned and the former purchaser would be liable for payment of deficiency to the Government. We have already stated that after the petitioner's bid was accepted, he did not deposit 25% of the purchase price offered. The petitioner also did not deposit the remaining amount of the purchase price within seven days. The nine lots of which the petitioner was the highest bidder were then re-auctioned and the petitioner is being made liable by the State Government for the deficiency. This liability of the petitioner is clearly covered by condition No. 13 of the sale notice. The petitioner's cage falls within the four corners of Section 82 of the Forest Act and the recovery as arrears of land revenue of the deficiency is fully covered by that provision. It was argued by the learned counsel for the petitioner that Section 82 does not create a new liability and that It only provides for a procedure for enforcing a liability and that in the absence of any contract In the manner provided in Article 299(1) there could be no liability to pay the deficiency. In our opinion, this argument cannot be accepted. Section 82 prop erly construed creates a statutory liability for recovery of the amount payable to the Government under the terms of a notice relating to the sale of forest produce by auction. This statutory liability can be enforced even though there is no contract as envisaged under Article 299 of the Constitution. This construction of Section 82 is strongly supported by the decision of the Supreme Court in A. Damodaran v. State of Kerala, (AIR 1976 SC 1533)."