Judgment

WANCHOO, J. : This is an appeal by special leave against the judgment of the Madhya Pradesh High Court. The brief facts necessary for present purposes are these. A notice was issued by the Divisional Forest Officer, Jabalpur Division for auction of various contracts in that division in July 1959. The conditions of the auction specified inter alia (a) that no person would be allowed to bid for any forest contract at the auction unless he had signed the sale notice in token of his agreement to abide by the conditions thereof and deposited a sum of Rs. 500 as earnest money in respect of each forest contract before bidding therefor; (b) that the Divisional Forest Officer reserved to himself the power without assigning any reason to accept the highest or any bid; (c) that the consideration due under a contract was to be payable where it exceeded Rs. 3,000, in four equal instalments, the first instalment being payable immediately at the close of the auction. (d) that the successful bidder had to sign immediately at the close of the auction the bid-sheet for the contract knocked down in his favour, (e) that the sales of contracts beyond the power of sanction of the Divisional Forest Officer were subject to the sanction of the competent authority and the successful bidder was bound by his bid until orders were passed by the competent authority; (f) that the contract deed and the security bond were to be executed by the successful bidder and his surety immediately at the close of the auction; (g) that if the successful bidder fails to pay the full amount of the consideration, or the first instalment or to furnish the security required or to complete the formalities, the earnest money deposited by him was to be forfeited to Government and the contract would be re-auctioned at the risk of the successful bidder and any deficiency happening on such re-sale would be recoverable from the successful bidder as arrears of land revenue; and (h) that the act of bidding was deemed to be a complete and unreserved acceptance of these conditions and others which are not material for our purposes.

2. The appellant bid for two contracts at the auction and his were the highest bids. As the amount of the contract money was more than what the Divisional Forest Officer could accept, the matter was referred to the Chief Conservator of Forests who had the necessary authority to accept the bids. After the close of the auction the appellant had signed the contract form and a surety signed the security bond as required. These documents were sent to the Chief Conservator of Forests for sanction and signature. Before however the Chief Conservator of Forests could accept the contract, the appellant raised a dispute as to the marking of the trees according to the material notified at the time of the auction. As that dispute was not settled to the satisfaction of the appellant he refused to complete the contract or to pay the first instalment in respect thereof. Eventually the Divisional Forest Officer gave notice to the appellant on July 29, 1959 that if he did not complete the formalities within a week, action would be taken under the conditions of auction to re-auction the contract and if there was any deficiency it would be recovered from him and the earnest money would be forfeited. He did not however pay the first instalment due and ultimately on November 25, 1959 he was informed that the sale of the two contracts sold in the auction held on July 20, 1959 in his favour had been cancelled by the Chief Conservator of Forests and the amount of earnest money had been forfeited. He was also informed that the two contracts would be re-auctioned at his risk. Thereafter the contracts were re-auctioned in January 1960. At the re-auction there was a deficiency in the two contracts together of Rs. 51,500. The appellant was therefore asked to send this amount to the Divisional Forest Officer. When he failed to do so, a letter was addressed to the Tahsildar Jabalpur