IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 31846 of 2006(N)
1. SHAHUL HAMEED, AGED 31 YEARS,
... Petitioner
Vs
1. THE DISTRICT COLLECTOR, KANNUR.
... Respondent
2. REVENUE DIVISIONAL OFFICER,
3. DIVISIONAL FORST OFFICER,
4. STATE OF KERALA, REPRESENTED BY
For Petitioner :SRI.M.SASINDRAN
For Respondent :GOVERNMENT PLEADER
The Hon'ble MR. Justice V.K.MOHANAN
Dated :24/07/2009
O R D E R
V.K.MOHANAN, J.
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WPC . No.31846 OF 2006
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Dated, the 24th day of July, 2009
JUDGMENT
The petitioner, who participated in the auction
conducted on 18.11.2004 connected with sale of timber
(under section 64 of the Sale of Goods Act), approached
this Court praying inter alia to call for the records
leading to Ext.P10 and quash the same by issuing a writ
of certiorari. It is also prayed to issue a writ of
mandamus directing the Ist respondent to release the
timber purchased by the petitioner in the auction held
on 18.11.2004 which was confirmed as per Ext.P2.
2. The specific case of the petitioner is that
pursuant to Ext.P1 auction notice dated 8.10.2004, he
had participated in the auction. Though in Ext.P1, the
first date fixed for the auction was on 21.10.2004, the
same was adjourned as nobody was prepared to offer
the upset price fixed as per the notification. Thus re-
auction was conducted on 18.11.2004 and the
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petitioner offered a sum of Rs.4,83,000/- as the
maximum price of the timber and the same was accepted
and, accordingly, the petitioner remitted the amount on
19.11.2004 as per the terms contained in Ext.P1 notice.
Subsequent to that, the first respondent issued Ext.P2
order dated 4.12.2004 by which the sale was confirmed.
As the sale was confirmed, the petitioner approached the
3rd respondent seeking transit pass for transporting the
soft wood, and thus, Ext.P3 permit dated 16.12.2004
was issued, on the basis of which, he had removed the
soft wood. Thereafter, the petitioner preferred Ext.P4
application dated 17.2.2005 for the transit pass for
removing the Rose wood. The Village Officer, Kannavam,
as per Ext.P5 report dated 18.2.2005, recommended that
the pass can be issued as sought for. But the 3rd
respondent D.F.O. was reluctant in issuing the requisite
transit pass on the ground that the timber was
undervalued and, according to him, the timber auctioned
would fetch the value more than Rs.10 lakhs. As there
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was no favourable action from the 3rd respondent, the
petitioner preferred Ext.P6 petition dated 3.3.2005 before
the District Collector, Kannur-first respondent herein.
However, the Ist respondent issued Ext.P7 order stating
that the matter has been referred to the Government and
the auction sale in the name of the petitioner was
ordered to be kept in abeyance until further orders.
Aggrieved by Ext.P7 order, the petitioner approached the
this Court by filing WPC No. 20275/2005 which
culminated in Ext.P9 judgment dated 16.2.2006 by which
this court directed the District collector to pass final
orders in the matter after affording an opportunity of being
heard to the petitioner and taking into account his
contentions, and also directed to pass order within one
month from the date of production of a copy of that
judgment. It appears that in the light of Ext.P9 judgment,
the District Collector passed Ext.P10 order which is now
challenged by the petitioner in this writ petition.
3. Controverting the contentions raised by the
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petitioner, 3rd respondent has filed a counter affidavit. In
the counter affidavit, there is no dispute regarding the
facts asserted by the petitioner up to the stage of issuing
Ext.P3 transit pass and Ext.P5 report of the Village Officer.
According to the respondents, District Collector issued
the confirmation order under the belief that value of the
timber was correct. It is also stated that against auction
sale of trees, the Secretary, Adivasi Kshema Samithi,
Kuthuparamba Area Committee filed a petition before the
Revenue Divisional Officer, Thalassery, and the DFO
Kannur, conducted a suo motu valuation and filed a
report on 28.2.2005 informing that the value of Rose
wood trees alone would fetch more than Rs.10 lakhs.
According to the counter affidavit, upon the above
report, the District Collector passed Ext.P7 order. It is
also stated in the counter affidavit that the Ist
respondent Collector was satisfied that the value of the
timber was much higher than the amount remitted
and, therefore, Ext.P10 order was issued. According to the
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respondents, if the rosewood is released in favour of the
petitioner, in the light of Ext.P2 and other auction
proceedings, the Government has to sustain huge loss and
in order to save the interest of the Government, Ext.P10
was issued. It is also stated that the writ petition is not
maintainable. It is also pointed out that consequent to
Ext.P1 order, the RDO, Thalassery issued orders to
refund to the petitioner 60.7% of the bid amount with
taxes plus the proportionate cutting cost of the trees as
valued by the RDO Thalassery. Exts.R3(a) and R3(b) are
the orders thus issued by the RDO. According to the
respondents, in view of Clauses 11, 12 and 13 of Ext.P1,
the respondents have authority to cancel the bid,
especially, when the action of the respondents is to save
the interest of the State.
4. I have heard the learned counsel for the petitioner
as well as Sri P.M.Poulose, the Special Government
Pleader (Forests) and also perused the materials on record.
5. From the facts which are beyond dispute, it
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appears that the petitioner participated in the auction
which conducted on the basis of Ext.P1 auction notice
wherein, a list of the trees to be auctioned and the
terms and conditions regarding the auction and the
value to be remitted are given. It is also a fact that on the
first auction date fixed as per Ext.P1 notice, there was
no bidder to offer the upset price as notified in Ext.P1. It
was under the above circumstances, auction date was re-
scheduled as to 18.11.2004. The petitioner being the
highest bidder, the sale proceedings was finalised in
favour of him and he had made the payment of
Rs.4,83,000/- on 19.11.2004, in fully compliance with the
terms of the conditions contained in Ext.P1. As the
petitioner performed his part of the agreement of
contract, the first respondent Collector by issuing Ext.P2
order dated 4.12.2004, confirmed the auction sale. In
pursuance of the confirmation of sale, the petitioner has
also removed the soft wood and the above fact is also
not under dispute. Exts.R3(a) and R3(b) documents
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produced by the respondents are disputed by the
petitioner. Though the petitioner preferred Ext.P4
application on 17.2.2005 for transit pass for transporting
the rose wood, though the auction was on 18.11.2004
and the same was confirmed on 4.12.2004, in the
meanwhile, there was no objection from any corner.
6. In this juncture, it is also relevant to consider
Ext.P2 confirmation order. In Ext.P2 order, it is specifically
stated about the report of the RDO, which says that, there
is no possibility to get more amount even if the auction is
postponed or cancelled. So, at the time of the issuance of
Ext.P2 order, the Ist respondent, who is the competent
authority, came into a definite conclusion that there is no
scope for cancellation or postponement of the auction.
It was under the above circumstances, the sale was
confirmed in favour of the petitioner. The above
observation and finding of the Ist respondent is after
consideration of Clauses 13 and 5 of Ext.P1.
7. The learned Special Government Pleader
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emphatically submitted that in view of clause 13 and 5 of
Ext.P1, the Government/Department is fully justified in
issuing Ext.P10 order because the amount fixed in Ext.P1
as upset price and the amount tendered by the petitioner
are comparatively very low from the actual price which
would have been fetched for the timber in auction.
8. On a close perusal of Ext.P1 notice and the terms
and conditions contained therein, I am of the view that the
Government or the Departmental authorities or the
District Collector has got ample power either to postpone
or cancel the auction for any reason, including the
reasons that mentioned in Clause 13. But those clauses
applicable and the powers vested with the respondents
as per those Clauses, can be exercised only before
confirmation of the sale. If any defect or illegality with
respect to the auction or any incidental proceedings
connected therewith, if brought to the notice of the
concerned authorities, certainly the auction can be set
aside or postponed. But that should be done before the
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confirmation.
9. It is in this context, the points raised by the
learned counsel for the petitioner under section 64 of the
Sale of Goods Act 1930 assumes importance. Section 64
of the Sale of Goods Act, 1930 declared that sale in an
auction sale is complete, when the auctioneer announces
its completion by the fall of hammer or any other
customary manner. In this case, as evidenced by Ext.P2,
the sale is complete and by the removal of soft wood, the
contract itself is materialised except the removal of rose
wood. If that be so, such legal impediments cannot be
circumvent by the issuance of Ext.P10 order under the
guise of exercising the power contained clause 13 of
Ext.P1 contract.
10. If the contention of the learned Government
Pleader is accepted that even after confirmation, the
powers vested under the above clauses can be exercised,
there will not be any finality for the contract of sale. In
this juncture, it is also relevant to note that Ext.P1 notice
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was issued after assessment of the value of the timber to
be auctioned and it is also a fact that at the first date of
auction, nobody came forward to bid the timber on the
basis of the upset price fixed in Ext.P1 notice. If that be
so, the reason given in Ext.P10 cannot be taken as a
ground so as to invoke Clause 13 of Ext.P1, especially,
when the RDO, a competent authority, reported that there
is no scope for getting higher price for the timber. It is
also relevant to note that pursuant to the finalisation of
the auction sale in favour of the petitioner and after
confirmation of the auction by Ext.P2, the petitioner has
also removed the soft wood and thus the latter part of
the contract has already been worked out to a certain
extent which is sufficient to hold that performance of the
contract is materialised. In such a situation, at a belated
stage, the respondents cannot cancel the auction held on
18.11.2004, that too, after Ext.P2 confirmation. Therefore
Ext.P10 is not legally sustainable.
In the result, Ext.P10 is quashed. The first
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respondent is directed to release the timber purchased by
the petitioner in the auction sale held on 18.11.2004 as
per Ext.P1 and the 3rd respondent is directed to issue
necessary pass to transport the timber including rose
wood. In the light of the above orders, no further order is
required in terms of prayer No.4 in this writ petition.
The Writ Petition is allowed to the above extent.
V.K.MOHANAN, JUDGE
kvm/-
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V.K.MOHANAN, J.
O.P.No.
JUDGMENT
Dated:..