IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.K.MOHANAN FRIDAY, THE 24TH JULY 2009 / 2ND SRAVANA 1931 WP(C).No. 31846 of 2006(N) --------------------------------------- PETITIONER: ------------------- SHAHUL HAMEED, AGED 31 YEARS, S/O.IBRAHIM, T.B. HOUSE, VENGAD P.O., KANNUR DISTRICT. BY ADVS. MR.M.SASINDRAN, MR.T.R.JAGADEESH. RESPONDENTS: ------------------------ 1. THE DISTRICT COLLECTOR, KANNUR. 2. REVENUE DIVISIONAL OFFICER, THALASSERY. 3. DIVISIONAL FORST OFFICER, KANNUR DIVISION, KANNUR. 4. STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, DEPARTMENT OF REVENUE, SECRETARIAT, THIRUVANANTHAPURAM. R1 TO R4 BY SPL.GOVT. PLEADER (FORESTS) MR. P.M.POULOSE. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 24/07/2009,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C). NO.31846/2006-N: APPENDIX PETITIONERS' EXHIBITS: EXT.P.1: COPY OF THE TENDER/AUCTION NOTICE DTD. 08/10/2004. EXT.P.2: COPY OF THE PROCEEDINGS DTD. 04/12/2004 ISSUED BY THE R.1. EXT.P.3: COPY OF THE PERMIT NO. 14451 DTD. 16/12/2004. EXT.P.4: COPY OF THE APPLICATION SUBMITTED BY THE PETITIONER DTD. 17/02/2005 BEFORE THE R.3. EXT.P.5: COPY OF THE RECOMMENDATION BY THE VILLAGE OFFICER, KANNAVAM DTD. 18/02/2005. EXT.P.6: COPY OF THE PETITION DTD. 03/03/2005 SUBMITTED TO THE R.1. EXT.P.7: COPY OF THE PROCEEDINGS NO. B3-46206/2000 DTD. 17/03/2005 ISSUED BY THE R.1. EXT.P.8: COPY OF THE NOTICE ISSUED BY THE VENGAD SERVICE CO-OPERATIVE BANK DTD. 26/05/2005. EXT.P.9: COPY OF THE JUDGMENT DTD. 16/02/2006 IN W.P.(C).20275/2005. EXT.P.10: COPY OF THE ORDER B1/46206/2000 DTD. 25/07/2006. EXT.P.11: COPY OF THE COVERING LETTER AND THE VALUATION STATEMENT DTD. 23/01/2004. EXT.P.12: COPY OF THE REGISTERED NOTICE ISSUED BY THE NORTH MALABAR GRAMIN BANK DTD. 13/02/2007. RESPONDENTS' EXHIBITS: EXT.R1.A: COPY OF THE PROCEEDINGS NO. C-2980/04 (II)DTD. 13/09/2006 OF REVENUE DIVISIONAL OFFICER, THALASSERY. EXT.R1.B: COPY OF THE PROCEEDINGS NO.C-2980/04 DTD. 27/10/2006 OF REVENUE DIVISIONAL OFFICER, THALASSERY. EXT.R3.A: COPY OF THE PROCEEDINGS OF R.D.O. THALASSERY C/2980/04 (II) DTD. 13/09/2006. EXT.R3.B: COPY OF THE PROCEEDINGS OF R.D.O, THALASSERY, C. 2980/04 DTD. 27/10/06. //TRUE COPY// P.S. TO JUDGE. Prv. V.K.MOHANAN, J. ---------------------------------------- WPC . No.31846 OF 2006 ---------------------------------------- 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 WPC 31846/06 -:2:- 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 WPC 31846/06 -:3:- 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 WPC 31846/06 -:4:- 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 WPC 31846/06 -:5:- 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 WPC 31846/06 -:6:- 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 WPC 31846/06 -:7:- 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 WPC 31846/06 -:8:- 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 WPC 31846/06 -:9:- 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 WPC 31846/06 -:10:- 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 WPC 31846/06 -:11:- 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/- WPC 31846/06 -:12:- V.K.MOHANAN, J. O.P.No. JUDGMENT Dated:..