Judgment

SHELAT, J. :- The main question arising in these appeals, by certificate obtained from the High Court of Allahabad, is whether, on the facts and circumstances of the case, a concluded contract could be said to have been arrived at between the respondent firm and the Chief Conservator of Forests, Vindhya Pradesh for and on behalf of that State.

2. By a notice, dated August 27, 1953, the Chief Conservator of Forests invited tenders for the purchase of certain lac and lac products, the quantities whereof were set out therein. The conditions of sale, subject to which the said tenders were to be made, were as follows :

" x x x x

5. 25 per cent of the purchase price shall be deposited in cash or G. C. notes immediately after the close of sale.-

6. The sanction of the Government of final bids will be given at the spot.

7. All lac purchased must be removed within one month and on full payment; credit will be given on 25 per cent deposit. The lac will remain at the godowns at the risk of the purchasers after the sales are finished.

8. In case of default of payment of balance within one month the 25 per cent deposit shall be forfeited and the Government may resell lac in which case loss not recovered by the deposit will be recovered from defaulters............"

These conditions were announced at the time of the sale.

3. The respondent-firm submitted tenders for two areas, for Rs. 3,80,000 relating to Umaria Division and Rs. 7000/- for Chhatarpur Division. These tenders, being the highest, were accepted for and on behalf of the Chief Conservator of Forests. Though the respondent-firm had to deposit 25 per cent of the aforesaid two amounts, it deposited two sums only, namely, Rs. 7000/- and Rs. 500/- and asked for a week s time to pay the balance of the said 25 per cent initial deposit.

4. The respondent-firm having failed to deposit the balance of the said initial deposit of 25 per cent as also the remaining 75 per cent of the purchase price within time, the Forest authorities served upon the firm a notice dated March 7, 1962 to the effect that the said goods would be resold, and the deficit, if any, would be claimed from the firm. Since the respondent firm persisted in their said default and did not take delivery of the said goods, the lots relating to the Umaria and Chhatarpur Divisions were resold respectively for Rupees 1,88,000 and Rs. 3500. The difference between the price at which the tenders were accepted and the price recovered as a result of the resale came to Rs. 139,000 and odd. The Forest authorities thereafter sent a certificate to the Collector of Mirzapur to recover the said difference as arrears of land revenue, purporting to do so under S. 82 of the Indian Forest Act, 1927, and the Rewa State Forest Contract Rules, 1925 relating to such tenders.

5. The respondent firm thereupon filed to writ petitions in the High Court raising three contentions, viz., (1) that the said transaction did not result into a concluded contract between the respondent firm and the State of Vindhya Pradesh, (2) that the said Forest Rules did not apply, and (3) that the said difference of Rs. 1,39,000 and odd did not amount to arrears of land revenue as neither sec. 82 of the Forest Act nor the said rules applied. Those contentions were rejected by a learned Single Judge who heard the said writ petitions and the two writ petitions, were consequently dismissed. In a special appeal against the said judgment and order, a Division Bench of the High Court did not decide the first and the Second contentions. The Division Bench assumed that there was a concluded contract, but held that the amount claimed by the appellant State was in the nature of damages recoverable under Sec. 54 of the Sale of Goods Act and not as the balance of the price of the said goods, nor could it be the arrears of land revenue under S. 82 of the Act and rule 30 (3) (b) of the said Rules. On this reasoning, the High Court allowed the writ petitions, reversing the decision of the l