An implied contract, such as the one in the present case by which the petitioner and the State bound themselves by the stipulations on which the auction was held, is not a contract to which Article 299 of the Constitution is attracted.

( 1 ) THIS petition under Article 226 of the Constitution challenging the legality of the recovery of Rs. 51,500/- as arrears of land revenue from the petitioner has been filed in the following circumstances.

( 2 ) THE petitioner's bids at an auction of two parts of coupe No. 1, Hulki, of Bargi range were accepted by the Chief Conservator of Forests. Thereafter some dispute arose between the petitioner and the Forest Department about the marking of the trees according to the 'material notified' at the time of the auction. The dispute was not settled to the satisfaction of the petitioner. The petitioner avers that on account of this dispute he refused to complete the contract or to pay the first instalment in respect of the forest contract. According to the State, the applicant actually signed the contract (exhibited at page 61 of the paper-book) and also furnished security for the same. On behalf of the State the contract was signed not by the Chief Conservator of Forests, Rewa, but by the Divisional Forest Officer, jabalpur Division. When the applicant failed to pay the balance of the first instalment due from him and to get the security bond furnished by him signed by his surety, the Divisional forest Officer informed him on 29th July 1959 that if he did not complete these "formalities" within a week, action as per condition 14 of the auction sale notice would be taken and the earnest money deposited by him would be forfeited to the state. The applicant was also told that the coupe would be reauctioned and any deficiency occurring on such resale would berecoverable from him as arrears of land revenue. The applicant did not pay the balance amount of the instalment due from him and did not complete the formalities. He was again asked in August 1959 to pay the instalment amount and complete the formalities. He again failed. Ultimately on 25th November 1959, the petitioner was informed that the Chief conservator of Forests had cancelled the acceptance of his bids and that the coupe would be reauctioned at the petitioner's risk in January 1960. The reauction resulted in a loss of Rs. 51,500/- to the Forest Department. The applicant was asked to remit this amount to the Department. When he failed to do so, the divisional Forest Officer, Jabalpur, addressed a letter to the Tahsiidar, Jabalpur, for recovering Rs. 51,500/- as arrears of land revenue from the applicant.

( 3 ) THE petitioner contends that he is not liable to pay the amount demanded from him and prays that a writ of certiorari be issued for quashing the demand notice and the proceedings for the recovery of the amount of Rs. 51,500/- from him as arrears of land revenue.

( 4 ) THIS matter had first come up for hearing before a Division Bench and it has now come up before us on a reference by the Division Bench. The Division Bench was of the opinion that the main question which required determination in the case was whether in the absence of a written contract the State was entitled under rule 29 of the Forest Contract Rules to recover from the petitioner the difference between the amount of the bid accepted at the reauction and the amount of the bids offered by the applicant in the first auction. Before the Division Bench learned government Advocate relying On Mulamchand Ratilal v. State of Madh Pra AIR 1960 Madh Pra 152, contended that the Department was entitled to recover the aforesaid amount from the applicant even if there was no proper contract in writing. In that ease it was held in relation to a contract for the right to propagate and collect lac in forest areas that the person whose bid was accepted at the auction was liable to pay the amount of annual instalments even if no document embodying the transaction had been executed. The Division Bench felt that the view taken in Mulamchand Ratiltd's case, AIR 1960 Mad Pra 152, (supra) was not correct. Accordingly the matter was referred to a Full Bench.

( 5 ) IN our judgment, the question whether Rules 28