P. VENKATARAMA REDDY J.

( 1 ) THE petitioner-company challenges in this writ petition the Memo No. 23950/for. III/89-1, dated 18-10-1989 issued by the Principal Secretary to Government (Energy and Forests) informing the Principal Chief Conservator of Forests that the request of the petitioner-company to withdraw the demand raised by the Divisional Forest Officer was rejected. By his proceedings dated 16-1-1989, the Divisional Forest Officer, Rajahmundry demanded the payment of a sum of Rs. 25,18,413. 00from the petitioner towards the value of 24,500 cum. of mixed hardwood allotted to the petitioner for the year 1987-88 on the ground that the petitioner-company failed to pay the amounts pursuant to the notice dated 4-3-1988 and 17-3-1988 and take possession of the hard wood allotted as per the terms and conditions of supply. The amount was arrived at by deducting from the amount of Rs. 40,82,915. 00 originally demanded, the sale proceeds of. Rs. 15,64,502. 00 realised in the auction held on 12-4-1988.

( 2 ) TO put it in a nut-shell, the contention of the petitioner is that in the eye of law, the contract for the purchase of hardwood was not entered into at all by the petitioner and therefore the purported recovery of the amount under the terms of a, non-existing contract is arbitrary and without authority of law. The re-auction of hardwood on the footing that the property in the material once passed to the petitioner-company and on its default to take possession, reverted back to the Forest Department -- is also assailed as a fiction without factual basis.

( 3 ) THOUGH, at first blush, we felt that the issue centre round an alleged contract and could be more appropriately decided in a civil suit, on a deeper consideration, we felt that the relief under Art. 226 of the Constitution ought not to be denied to the petitioner on that ground. Having regard to the contention of the petitioner that the company is sought to be saddled with a liability on the basis of an inconclusive contract and the respondents are bent upon realising the alleged dues under the Revenue Recovery Act, we thought it just and proper to adjudicate whether the purported action is arbitrary, without the need to go into any disputed facts. The fact that the writ petition was admitted more than seven years back and kept pending all these years is another consideration that weighed with us in resolving this dispute in exercise of our jurisdiction under Art. 226 of the Constitution.

( 4 ) IN order to appreciate the points arising for our decision, it is necessary to refer to the admitted correspondence between the parties in chronogogical order. At the outset, we may clarify that it is common ground that there is no formal written contract between the parties.

( 5 ) THE petitioner is running a paper industry having its factory at Rajahmundry. Hardwood is one of the raw materials required for the manufacture of paper. The Principal Chief Conservator of Forests, by his letter dated 23-6-1987, informed the, petitioner that mixed hardwood required by the company for the year 1987-88 will be supplied by sale of 40,000 M. T. from Rajahmundry and 15,000 M,t. from Guntur before 31-3-1988. The petitioner was asked to approach the Conservators of Forests, Rajahmundry and Guntur for further details of areas of supply, etc. It is indicated in the letter that the Forest Department will extract the material departmentally and supply the same in stacks of specified sizes. As soon as the material was ready for handing over in any strip of any coupe, a notice will be sent to the company by the Divisional Forest Officer concerned and the material will be handed over to the Company s representative at the coupe onpayment of royalty and other amounts due for the material. It is then stated in the letter that "the company shall take possession of the material within ten days from the date of intimation and lift the material allotted within 45 days of allotment of such material. " It i

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