IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C) No. 18751 of 2007(G)
1. D.K.SUDHEER, S/O. DIVAKARAN,
... Petitioner
Vs
1. THE GOVERNMENT OF KERALA,
... Respondent
2. CHIEF CONSERVATOR OF FORESTS (VIGILANCE)
3. CONSERVATOR OF FORESTS (I & E),
4. CONSERVATOR OF FORESTS,
5. DIVISIONAL FOREST OFFICER,
6. DEPOT OFFICER,
7. KERALA FOREST RESEARCH INSTITUTE,
For Petitioner :SRI.V.N.ACHUTHA KURUP (SR.)
For Respondent :GOVERNMENT PLEADER
The Hon'ble MR. Justice ANTONY DOMINIC
Dated :01/10/2007
O R D E R
ANTONY DOMINIC, J.
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W.P.(C) No.18751 OF 2007
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Dated this the 1st October, 2007
J U D G M E N T
The issue that arises for consideration is whether
cancellation of an auction by Exts.P4 and P5 is legal or
not?
2. Ext.P1 Tender Notice was issued by the 2nd
respondent inviting tender in respect of various types of
timber in the different depots of the Department of
Forests, including the Government Timber Depot, Achankovil
in Kollam District, scheduling the same to 25.04.2007.
Being a timber merchant, petitioner participated in the
auction held and was the successful bidder in respect of 25
lots of teak and 3 lots of Punna. On settlement of the
auction, in compliance with the conditions of sale,
petitioner remitted 1/5th of the bid amount and Exts.P2 and
P3 are the receipts acknowledging payment. However, while
awaiting order of confirmation of the auction, Ext.P4
communication was received informing the petitioner that
the auction held at the Government Timber Depot, Achankovil
on 25.04.2007 has been canceled. He made enquiries when it
was revealed that based on Ext.P6 report of the 2nd
respondent, Ext.P5 order was issued by the 1st respondent
directing cancellation of the auction. Petitioner has
produced Ext.P7, copy of a complaint received by the
control room of the 1st respondent in regard to the auction
held on 25.04.2007. Ext.P8 is a letter issued by the then
Divisional Forest Officer, requesting the 4th respondent to
confirm the instruction of the Hon’ble Minister for Forests
W.P.(C) No. 18751 OF 2007 2
to cancel the auction in question.
3. Petitioner would allege that the cancellation of
auction by Exts.P4 and P5 are illegal, arbitrary and
vitiated by malafides. According to him Ext.P5 is based
entirely on Ext.P6 report and that a reading of Ext.P6
report reveals that no procedural irregularity has been
found in respect of the auction in question. It is also
alleged that the political party in power, made demands
from contractors and that it was on account of their
inability to satisfy such demands that the auction was
cancelled. He also raises a plea that the 1st respondent
had no authority to issue Ext.P5 and that usually the order
of confirmations/ cancellation is made by the respective
Conservator of Forests. It is also his contention that no
reason is stated in Ext.P5 as to why the 1st respondent had
stepped into the shoes of the 4th respondent. Further, it
is also alleged that in issuing Ets.P4 and P5, natural
justice has been violated.
4. On behalf of the 4th respondent a statement has
been filed. It is alleged that though the petitioner was
the highest bidder in respect of some of the lots, the
auction was not confirmed in his favour nor has the
department entered into any contract with the petitioner.
It is contended that the petitioner has no legal right to
insist that the timber in question should be sold to him or
that the sale should be confirmed. It is alleged that the
writ petition is apparently filed on behalf of the then
DFO, who has retired on superannuation on 30.04.2007 and
that the documents attached to the writ petition are copies
available in the DFO’s office, which are inaccessible to
the petitioner and that the petitioner had not even applied
for copies under the provisions of the Right to Information
Act.
5. It is stated that the Government had received
W.P.(C) No. 18751 OF 2007 3
various complaints regarding the improper classification of
timber sold in the auction and hence the 4th respondent had
given instruction to the DFO not to conduct the auction
pending verification by higher authorities. According to
the 4th respondent despite the instructions given at about
10 p.m. on 24.04.2007, and 10 a.m. on 25.04.2007, ignoring
the same, the DFO had conducted auction scheduled on
25.05.2007.
6. It is stated that a preliminary verification in
the depot was conducted on 27th and 28th of May 2007 when it
was revealed that high quality teak logs qualifying for
Class B, were classified as Class C. The 2nd respondent had
sent a report to the Government on 30.07.2007 and it was on
that report, the auction was directed to be cancelled.
According to the respondent if the auction was confirmed,
the timber would not have fetched the price it should have
and therefore the cancellation was in public interest.
7. The Learned Government Pleader also filed a
comparative table indicating the sale proceeds as I.A. No.
13035 of 2007. This indicates that in the auction held on
25.04.2007, for 841.558 m3 the total amount realized by the
department was Rs.3,11,41,329/-. It is also shown that in
the subsequent auctions held on 22.06.2007 and 22.08.2007,
the total quantity sold was 779.777 m3 and the total amount
realized was Rs.3,13,38,249/-. Therefore, while leaving a
balance of 61.681 m3 to be sold, the respondents have
already realized an excess amount of Rs.1,96,920/-. The
attempt of the respondents, obviously is to indicate that
by cancelling and re-auctioning the timber, they have
realized a substantially higher amount.
8. Essentially what calls for a decision in this case
is the correctness of Exts.P4 and P5 by which the auction
has been cancelled. At this stage, before anything else, I
should examine whether petitioner has any legal right to
W.P.(C) No. 18751 OF 2007 4
insist that the auction shall not be confirmed. Ext.P1 is
only a notice inviting bids, which is only an offer made by
the 1st respondent.
9. Auction in pursuance to Ext.P1 can result in a
concluded contract only when sale is confirmed and the
procedure in this behalf is completed. In this case,
though the petitioner was the highest bidder, it is
admitted that sale was not confirmed in his favour nor has
the Department entered into any agreement with the
petitioner. Therefore, the position is that there is no
concluded contract in his favour. If that be so, if the
respondents have decided to cancel the auction, petitioner
cannot be heard to complain that by the said decision any
of his legal right is affected.
10. The further question that arise is whether the
respondents were justified in cancelling the auction.
Records would show that complaints were received alleging
irregularities in the classification of timber. In the
statement it is also averred, without contradiction by the
then DFO, that prior to the auction the DFO was instructed
to cancel the auction and that it was ignoring the same the
auction was held. It is also evident that on the
instruction of the 1st respondent, verification was held and
Ext.P6 is the report submitted. In Ext.P6 it is confirmed
that in the auction held procedural formalities have been
complied with. But it is stated that regarding the
classification of the timber reverification is necessary.
It is acting upon Ext.P6 report that Ext.P7 order was
issued by the 1st respondent. If there was such a material
indicating irregularity in the matter of classification of
the timber in question, on which depends the value realized
in the auction, I do not see anything irregular in the
decision of the respondents to cancel the auction.
11. Petitioner complains that the 1st respondent had
W.P.(C) No. 18751 OF 2007 5
no jurisdiction to issue Ext.P1 and that the Minister
concerned had intervened in the matter. True it is the 1st
respondent which has issued Ext.P5. Apart from stating
that confirmation/ cancellation are usually on the orders
of the concerned Conservator of Forests, the petitioner has
not produced any material to conclude that the 1st
respondent lacked jurisdiction to issue an order in the
nature of Ext.P5. Even otherwise, I do not see any
subsistence in this contention. If the Government had
received complaints alleging irregularity in the auction,
it being the custodian of the resources of the state, is
certainly entitled to issue orders and thus prevent
irregularities. Similarly, if on receipt of a complaint,
the Minister in charge of the department issues an order
not to proceed with the auction, I cannot see any absence
of jurisdiction in such a step, especially when there is
nothing to prove any malafides on his part.
12. In a matter like this, question is whether public
interest deserves interference with the action of the
authorities. It is settled law that in the award of
contracts or in finalizing tenders, the court has to be
guided by public interest and interference with decisions
taken by the authorities is permissible only if public
interest warrants it and not on the making of a legal
point. In this case, the fact that public interest has
been safeguarded is evident from the figures supplied by
the Learned Government Pleader through I.A.No.13035 of 2007
which shows that even as of now, 779.777 m3 is remaining to
be sold whereas the department has already realized
Rs.1,96,920/- in excess of what was realized by them while
disposing of the whole of 841.558 m3 timber. That apart
the auction having been held against the instruction of the
government, the respondents were justified in interfering
in the matter.
W.P.(C) No. 18751 OF 2007 6
13. Thus, on an overall consideration of the issue, I
am satisfied that the petitioner has not made out a case of
interference. Writ petition fails and is dismissed.
ANTONY DOMINIC, JUDGE
pr/jan.