1. Two confessed defaulters seek redress under Art.226 of the Constitution in practically identical circumstances in these two writ petitions. For convenience, therefore, it is sufficient to refer to the petitioner and the facts in one writ petition, O. P. No. 3799 of 1981.

2. The Divisional Forest Officer, Palghat, notified on 4th December, 1979 that the right of collection and removal of all timber and firewood except Teak, Rosewood and other enumerated categories of wood, in specified areas will be offered for sale in public auction subject to certain conditions. The auction was held on 26-12-1979 and the petitioner was permitted to bid after he made the earnest money deposit of Rs. 1,000/- and signed a copy of the sale notice in token of having accepted all the conditions. He was the highest bidder with a bid of Rs. 3,31,000/-. He also paid on the sale date Rs. 10,000/- less the earnest money deposit already paid. Within a week thereafter, on 8-1-1980. he, however, informed the first respondent, the Divisional Forest Officer, through a lawyer notice that he was withdrawing his offer, and requesting for refund of the amount paid by him. The first respondent declined his request and the sale was confirmed on 4-2-1980. The petitioner refused to pay the instalments or execute the agreement as per the conditions of auction. Treating him as a defaulter, resale was ordered and the fresh sale was conducted on 7-5-1980 and the highest bid was only Rs. 2,35,000/-, less than Rs. 96,000/- covered by the first auction. The loss caused Rs. 96,250.33, was sought to be recovered from the petitioner. A demand notice was sent directing the petitioner to remit the amount within fifteen days of the date of receipt of the notice failing which be was warned that revenue recovery steps would be initiated. Faced with the threat of auction under the Revenue Recovery Act, which even allowed immediate attachment of movables on mere show of a demand notice, the petitioner rushed to this Court and filed this Writ Petition on 9-2-1988.

3. Shri. Sugunapalan, learned counsel for the petitioner submitted that after the petitioner withdrew his offer, before the sale was confirmed there was no contract with the Government and there could be no breach of that contract. It was also submitted, assuming that there was a contract, the petitioner did not execute any agreement as contemplated under the auction or in conformity with Art.299 of the Constitution and thus there was no valid contract to sustain a claim for its breach. The Government, it is stated, cannot in any case, be the arbiter regarding the quantum of damages and the claim now made is not sustainable in law.

4. The learned Advocate General, appearing for the State contended that the State was enforcing only a statutory liability and not any contractual obligation and relied on S.79 of the Forest Act and S.68 of the Revenue Recovery Act for the purpose. The petitioner was bound by the conditions of auction and he could not be permitted to withdraw after he participated in the bid and was declared the highest bidder. It was again pointed out that the claim was only for liquidated damages specified in the auction notice, and there was no necessity to conduct any enquiry to fix the quantum.

5. The conditions of auction, Ext. R1 (a) provided that before being permitted to bid, the intending bidder must make an earnest money deposit, E.M.D. for Rs. 1,000/- in cash and also sign a copy of the sale notice in token of having accepted all the conditions therein. There is no dispute that the petitioner complied with these conditions. He therefore bound himself to abide by all the conditions of auction and the questions as to whether he was entitled to withdraw after making the highest bid, and whether be was required to make good the loss, if any, sustained by the Government consequent on his default, are matters referable to those conditions and the relevant statutory provisions.

6. Under the scheme