# [1972] 3 S.C.R. 629

- **Citation:** [1972] 3 S.C.R. 629
- **Court:** Supreme Court of India
- **Decided:** 1972-02-25
- **Bench:** K. S. Hegde, K. K. Mathew
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1972-3-s-c-r-629-5601
- **Pages:** 10

## Headnote

Cqntracts-Acceptance of auction
bi~ b,y Divisional Forest Officer
· r;ubject to confirmation by Government does nof result in concluded
contracts in the ab~nce of confirmation by
Governm.eint7""""Rules
of
Executive Busines9 of Bihar Government 1nade under Art. 166(3)
of
Constitution-Rule-10(1) as relaxe(i does not prohibit grallt of /eare by
vrivnte Neaty-Rule 10 (1) in so far llS it requires prior con.fultation with
Finance Depar'1nent is mnndatory.
The right to exploit a bamboo coup in the Hazaribagh district
of
Bibar was auctioned in August .1970.
The reserve price was Rs. 95,000/·
but the appellant's bid of Rs. 92,001/· being the highest was accepted by
the Divisional Forest Officer. Too petitioner deposited the security required and executed an agreement. The Divisional Forest Officer reported
obout the auc~ion sale to the Conservator of Forests, Hazaribagli Circkl.
As the price for which the coup was
provisionally
settled
exceeded
Rs. 50,000 / • the Conservator of Forests forwarded ili> papers reprding
the auction sale to the Deputy Sl:cfetary to the Government of Bihar,
Forest Department for confirmation of the acceptan<» by the Govctnment.
Since provisional . 'Settlement was made for an amount less than the reserve
prioe the matter was also referred to the Finance Department. When the
matter was pending the appellant expmserl his willingness to take the
settlement at the res:rve price of Rs. 95,000/- by his communication dated
October 26, 1970. The
appellant thereafter filed an application.. on
Sovembe< 3, 1970 praying for settlement of the <ioup on 111> b3sis of
the highest bid. The Minister of Forest by his proceedings dated NOYemfier 27, 1970 directed that 111> coup may be. settled with the highest bidder
viz .. ' the appellant at the reserve price. A telegram was sent by the Government. to the Consorvator of F<W.sts, Hazaribagh Circle on November
28, 1970 with copy of the same to the Conservator of Forest, Bihar
<:<>'nliniling the auction sale '3t 'the reserve price of Rs. 95,000/·. ·As
no intimati911 was receiwd by the Divisional Forest Officel" ·he did not
communicate the proceedings of the Minister to the appellant.
On JJecmber 24; respondent No. 6 filed a petition to the Government offering to
take the settlement of the coup in question for Rs. 101125/·. The
~1inister, by his proceedings dated December 13, 1970
canrelled
the
•ettlement of the coup with the appellant and settled the same with res.
pondcnt No. 6 fol: Rs, 101125 / -.
The appellant filed '3 writ petition
in the lfigb Court contending that there was a concluded contract when
the bid·. of the appellant was accepted by the Divisional _Fo.:est Olllcer
though that was subject to the confirmation by the Government and when
the Government confirmed acceptance by its proceedings dii&if Decanber
2 7, I 970. it was no longer within the power of the Gove'rnment ·to malre
the settlement of th~ coup upon the 6th ·respondent. It was abo contended that the settlement of the coup in favour of the 6th respoodent
was invalid because (a) rule IO(l) of the Rules of :£xecutive Business
made under Art. 166( 3) of the Constitution as relaxed by the letter of
the Deputy Secretary to the Government dated November 27, 1'67 P*
hibited the grant of r.ase by. private treaty and (b) the requirement of
12-Ll031SupCT/12
630
SUPREME COURT REPORTS
[1972] 3 S.C.R.
prior consull':ltion in r. 10( I) with the Finance Department was mandatory and had not been complied with.
The High Court rejected the
appellant's contentions. In appeal to this Court by special leave.
HELD : ( 1) The act~ptance of the appellant's offer was subject
to
confirmation by the Government and in the absence of such confirmation
there could be no concluded contract.
The appellant's bid was for Rs. 92001/ -.
The acceptance of the
bid by the Divisional Forest Officer was therefore, subject to confirmatioo
by the Government. The pro=ding of the Minister dated November 27,
I 970 would show that he did not confirm ac

## Text

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629
HARIDWAR SINGH
v .
BA GUN SUMBRUI AND ORS.
February 25, 1972
[K. S. HEGDE AND K. K. MATHEW, JJ.]
Cqntracts-Acceptance of auction
bi~ b,y Divisional Forest Officer
· r;ubject to confirmation by Government does nof result in concluded
contracts in the ab~nce of confirmation by
Governm.eint7""""Rules
of
Executive Busines9 of Bihar Government 1nade under Art. 166(3)
of
Constitution-Rule-10(1) as relaxe(i does not prohibit grallt of /eare by
vrivnte Neaty-Rule 10 (1) in so far llS it requires prior con.fultation with
Finance Depar'1nent is mnndatory.
The right to exploit a bamboo coup in the Hazaribagh district
of
Bibar was auctioned in August .1970.
The reserve price was Rs. 95,000/·
but the appellant's bid of Rs. 92,001/· being the highest was accepted by
the Divisional Forest Officer. Too petitioner deposited the security required and executed an agreement. The Divisional Forest Officer reported
obout the auc~ion sale to the Conservator of Forests, Hazaribagli Circkl.
As the price for which the coup was
provisionally
settled
exceeded
Rs. 50,000 / • the Conservator of Forests forwarded ili> papers reprding
the auction sale to the Deputy Sl:cfetary to the Government of Bihar,
Forest Department for confirmation of the acceptan<» by the Govctnment.
Since provisional . 'Settlement was made for an amount less than the reserve
prioe the matter was also referred to the Finance Department. When the
matter was pending the appellant expmserl his willingness to take the
settlement at the res:rve price of Rs. 95,000/- by his communication dated
October 26, 1970. The
appellant thereafter filed an application.. on
Sovembe< 3, 1970 praying for settlement of the <ioup on 111> b3sis of
the highest bid. The Minister of Forest by his proceedings dated NOYemfier 27, 1970 directed that 111> coup may be. settled with the highest bidder
viz .. ' the appellant at the reserve price. A telegram was sent by the Government. to the Consorvator of F<W.sts, Hazaribagh Circle on November
28, 1970 with copy of the same to the Conservator of Forest, Bihar
<:<>'nliniling the auction sale '3t 'the reserve price of Rs. 95,000/·. ·As
no intimati911 was receiwd by the Divisional Forest Officel" ·he did not
communicate the proceedings of the Minister to the appellant.
On JJecmber 24; respondent No. 6 filed a petition to the Government offering to
take the settlement of the coup in question for Rs. 101125/·. The
~1inister, by his proceedings dated December 13, 1970
canrelled
the
•ettlement of the coup with the appellant and settled the same with res.
pondcnt No. 6 fol: Rs, 101125 / -.
The appellant filed '3 writ petition
in the lfigb Court contending that there was a concluded contract when
the bid·. of the appellant was accepted by the Divisional _Fo.:est Olllcer
though that was subject to the confirmation by the Government and when
the Government confirmed acceptance by its proceedings dii&if Decanber
2 7, I 970. it was no longer within the power of the Gove'rnment ·to malre
the settlement of th~ coup upon the 6th ·respondent. It was abo contended that the settlement of the coup in favour of the 6th respoodent
was invalid because (a) rule IO(l) of the Rules of :£xecutive Business
made under Art. 166( 3) of the Constitution as relaxed by the letter of
the Deputy Secretary to the Government dated November 27, 1'67 P*
hibited the grant of r.ase by. private treaty and (b) the requirement of
12-Ll031SupCT/12
630
SUPREME COURT REPORTS
[1972] 3 S.C.R.
prior consull':ltion in r. 10( I) with the Finance Department was mandatory and had not been complied with.
The High Court rejected the
appellant's contentions. In appeal to this Court by special leave.
HELD : ( 1) The act~ptance of the appellant's offer was subject
to
confirmation by the Government and in the absence of such confirmation
there could be no concluded contract.
The appellant's bid was for Rs. 92001/ -.
The acceptance of the
bid by the Divisional Forest Officer was therefore, subject to confirmatioo
by the Government. The pro=ding of the Minister dated November 27,
I 970 would show that he did not confirm acceptance of the offer by the
Divisional Forest Officer. What the Minister did was not to confirm the
acceptance made by tho Divisioll".li Forest Officer bui to accept the offer
made by the appellant in his communication dated October 26, 1970
that he would take the coup for the reserved price of Rs. 95,000/. lberc
was. thorefolre, no confirmation of the acceptance of the bid to take the
coup in the settlement for the amount of Rs. 92,001/-. ·~634-G-635B]
If the offer that was accepted was the offel- contained in the communication of the appellant dated October 26, 1970 it could not be said that
there was any communicati(ln of the acceptance of that offer to the
appellant.
The
telegram
sent
to
the
Conservator
of
Forest,
Hazaribagh by the Government on November 28, 1970 could not be
considered as
a communication of the acceptance of that offer
to the
appellant.
The
acceptance
of
the
offer
was
nor
hen put in counie of transmission to the appellant; and so even as5uminl!"
that acceptance need not <!<>me to the- knowledge of the offl'!'or, the appellant could not contend that there was a concluded contract on the basis
of his offer cont,Uned in his communication dated October 26, 1970, as
. the acceptance of that offer was not put in the course of transmission.
Apari from that the appellant himself revoked the offer ma<h by him
on OctOber 26, 1970 by his letter dated November 3, 1970 in which he
stated that the coup may be settled upon him at the highest bid made
by him in . the auction. There was, thm no conclud,¢ contract between
the appellant and the ~overnment. f,6358-DJ
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The Raianagoram Village C<10perative Socit,v v, Veeraswami Mudaly,
,[1950] II M.L.J. 486, distinguished.
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Somasundaram
Pillai v. Provincial
Governmen( of Madras,· A.J.R.
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1947 Madras, 366, appl~.
(ii) Rule 10(1) in so far as it was relevant to the pre5ent case cn!y
says that" no department shall without prior consultation with the F'mance
DepartD>.lnt 'Outhorise by any order the lease cir license of mineral. of
forests.
The rule read in the context of its relaxation as mentionod in
the letter of the Deputy Secretary wotild only show that consultation with
the Finance Department is not necessary fdr a lease if leaoe is of land of
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the .value of more tllan Rs. 50,000/-
.and is
granted in pursuance
of public auction held in conformity with the conditions mentioned in the
letter of the Deputy Secretary,
The rule wmther before or after ,.,_
laxation did" not prohibit the grant of leave by private treaty. [637C]
(iii) It was clear from records relating to the proceedings for the grant
of the lease in favour of the 6th respondent thst the Finance Department
was not consulted befo0> the Minister passed the order on j)ecember 13,
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1970 to grant lease." It could not be oaid that rule 10(1 ). in so .far as
it requires prior consultation with the Finance Department i• only drirOC'
tory and therefore even if there was no prior consultation the settlement
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HARIDWAR SINGH v. BAGUN SUMBRUI (Mal/Jew, J.)
631
was valid. The neg:itive or prohibitive language of rule 10(1) is
a
strong indication of the intent to make the rule mandatory.
Furthei:
rule 10(2) mak»s it clear that where prior consultation with the Finance
Department is,.required for a ·propOflal and the department on consultation, does not agree to the propOS".ll, the department originating the
proposal can take no further action on the propo;al. The Cabinet alone
would be compe~nt to take a decision.
Pridr consultation is therefore
an ess~n~ial prerequisite to the <!xcrci!I! of power. The orde/ passed b~
the Mmtster of Forest,
Government of Bihar on December 13 1970
settling the coup in favour of 100 6th ['espondent was, therefore ~d anJ
the order must be quashed. [637EF; 6380-FJ
Dattatreya Moreshwar Pangerkar v. The State of Bombay and Others,
[.1952] 2 S.C.R. 612 applied.
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CIVIL APl'ELLATE JURISDICTION: Civil Appeal No. 1807 of
1971.
.
Appeal by special leave from the judgment and order dated
May 6, 1971 ol the PatnaHigh Court in C.W.J.C. No. 41of1971.
L. M. Singhvi, S. C. Dingra and U. P. Singh, fortlie appellant.
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S. V. Gupte and B. P. Singh, for r11spondents Nos. 1 to 5.
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S. N. Prasad and D. N. Mishra, for respondent No. 6 ..
The Judgment of the Court was delivered by
Mathew, J. The appellant filed a writ petition before the
High Court of Patna praying for quashing an order passed by the
Minister or-Forest, Government of Bihar, on December 13, 1970,
and for issue of a writ in the nature of mandamus directing the
. respondents 1 to 5 to give effect to the previous order of the
Minister of Forest dated November 27, 1970. The writ petition
was heard by a Division Bench of the Court and the petition was
dismissed.
This appeal, by special leave, is from that judgment.
There is a bamboo coup know as "Bantha Bamboo coup"
in Chatra North Division of Hazaribagh district.
On July 22,
1970, the Forest Department of the Government of B,ihar adv~
tised for settlement of the right to exploit the coup by. ~blic
auction.
The auction was held in the. office of '!te D!vmouai
F0rest Officer Oil August 7, 1970.. Five persons mcluding . ~e
appellant participated in the auction.
Though the rese~e pnce
fixei! in. the tender notice was Rs. 95,000/ ·, the appellant.s .b.1d of
Rs. 92,001/-, being the highest, was accepted b)'. the Div1s1o~a\
Forest Officer.
The petitioner thereafter deposited the secll?t.Y
amount of Rs. 23,800/~ and execu~ an a~ent. The ;DlVI~
sional Forest Officer reporteii about the au~on sale to. the Conservator of Forests, Hazaribagh Circle, by his letter dated ~ugust
25, 1970.
As the price for which the coup was pro'vis1onally
632
SUPREME COURT REPORTS
[1972] 3 s.c.R.
settled exceeded Rs. 50,000/-, the Conservator of Forests forwar~cd the papers regarding the auction sale to the Deputy Secretary Id Government of Bihar, Fo~est Department, for confirmation
of the acceptance by the Govermnent.
Since the provisional
settlement was made for an amount less than the reserve price the
matter was also referred to the Finance Department. 'The
Finance Department invited comments from the Divisional Forest
Officer as .tO why the settlement was made for a lesser amount.
The Divisional Forest Officer, by his letter dated . October 30,
1970, submitted his explanation for the provisional settlement at
~n amount below the reserve price.
W]]en the matter was pend-
. mg before the -Government, the appellant expressed his willingness to take the settlement at the reserve price of Rs. 95,000/-,
by his communication dated October 26, 1970.
The appellant
thereafter filed an application on November 3, 1970, praying for
settlement of the coup on the basis of the highest bid.
The
Minister of Forest, by his proceedings dated November 27, 1970,
directed that the coup may be settled with the highest bidder,
namely the appellant, at the reserve price.
A telegram was sent
by the Government to the Conservator of Forests, Hazaribagh
Circle on November 28, 1970, with a copy of the same to the
Conservator of Forest, Bihar, confinning the auction sale to the
appellant at the reserve price of Rs. 95,000/-.
As no intimation
was received by the Divisional Forest Officer, he did not communicate the proceedings of the .Minister to the appell!jllt. . One
Md. Y akub, Respondent No. 6, filed a petition on December 4,
1970, before the Government of Bihar,
Respondent No.
1,
offering to take the settlement of the coup in question for
Rs. 1,01,125/-. A telegram was sent by the Government on
December 5, 1970; to the Divisional Forest Officer, directing him
not to take any action on the basis of the telegram dated November 28, 1970, sent to him in pursuance of the proceedings of the
Government dated November 27, 1970. That telegram
was
received by the Divisional Forest Officer on December 10, 1970,
and the Divisional Forest Officer, by his letter dated December 10,
1970, informed the Government that the previous telelgram dated
Nove!J1ber 28, 1970, was not received by him and so it content was
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not communicated to the appellant.
The whole matter was there-.
after placed before the Minister Of Forest and the Minister, by his
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proceedings dated December 13, 1970, cancelled the settlement of
the ooup with appellant a\ld settled the same with Respondent No.
6 for Rs. 1,01,125/-. The Government thereafter sent.telegrams
on December 21, 1970, to the Conservator of Forests aitd the Divi-
~ional Forest Officer, informing them that the coup had been
settled with Respondent No. 6. . The Di_vit>:ional Forest Officer,
by Iii$ letter dated December 23, 1970, directed }les~dent N'o,
6 to deposit the security amount and to pay the rust instalment.
Re5poildent No. 6 depositedthe same and executed an agreement.
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HARIDWAR SINGH v. BAGUN SUMBRUI (Mathew, J.)
633
The contention of the appellant in the writ petition was that
there was a concluded contract when the bid of the appellant was
accepted by the Divisional Forest Officer though that was subject
to confirmation by the Government and that, when the Government confirmed the acceptance by its proceedings dated November 27, 1970, it was· no longer within the power of Government
to make the settlement of the coup upon the 6th Respondent by
its proceedings dated December 13, 1970.
It was also contended in the alternative that the settlement of the coup in favour
of the 6th Re~pondent was in violation of statutory rules and,
therefore, in any event, that settlement was invalid.
As already indicated, the High Court negatived these contentions and upheld the validity of the settlement in favour of the
6th Respondent.
The special conditions in the tender notice makes it clear
that the Divisional Forest Officer has the right to accept a bid of
less than Rs. 5,000/-, that acceptance of a biid of more than
Rs. 5.000/- by him is subject to confirmation by the Chief Con-
'ervator of Forests and the Forest Department of the Bihar Government, that an auction sale for an amount of more than
Rs. 5,000/- would n0t be recognised until it is confirmed by the
competent authority, and that a bid made in auction and which
has been provisionally accepted by the Divisional F:orest Officer
shall be binding on the bidder for two months from the date of
auction or till the date of rejection by the competept authority,
whichever is earlier.
Counsel for the appellant contended that there was a conditional acceptance of the offer of the appellant by the Divisional
Forest Officer, that on confirmation by the Government, that
acceptance became unconditional and, therefore, there was a concluded contract when the Government confirmed the acceptance,
even though the confirmation was not commllnicated to the appellant.
In suppon of this, he relied on The Rajanagaram Village
Cooperative Society v. Veerasami Mudaly( 1). There it was held
that in the case of a 'conditional acceptance in the presence of a
l>idder, the condition being that it is subject to approval or confirmation by some other peyso.n, the acceptance, though conditional, has to be communicated and when that is communicated,
there is no further need to communicate the approval or confinna- .
tion which is the fulfilment of the condition. It was further _held
that a conditional acceptance has' the effect of binding the highest
bidder to the contract if there is subsequent approval or confumation by the person indicated, that he cannot resile from the contract or withdraw the offer, and if there is approval or confirma-
(1) [19501 11 M.L.J. 486.
634
SUPREME COURT REPORTS
tion, the contract · becomes concluded
and
enforceable.
This
decision was considered in Somasudaram Pillai v.
Provincial
Government of Madras(') where Chief Justice Leach, speaking
for the Court said that, to have an enforceable contract, there
must be an offer and an unconditional acceptance and that a person who makes an offer has the right to withdraw it before
acceptance, in the absence· of a condition to the contrary supported by consideration. He further said the fact that there has.
been a provisional or conditional acceptance would not make any
difference as a provisional or conditional acceptance cannot in
Itself make a binding· contract.
·
The question whether by an acceptance which is conditional
upon the occurrence of a future event a contract · .will become
concluded was considered by Williston and this is what he
says:(')
"A nice distinction may be taken here between ( 1 )'
a so-called acceptance by which the acceptor agrees to
become immediately bound on a condition not named
in the offer, and (2) an acceptance which adopts unequivocally the terms of the offer but states that it will
not be effective until a certain contingency happens or
fails to happen. In the first case there is a counter·
offer and rejection of the original offer; in the second
case there is no counter-officer, since there is no assent
to entei; into an immediate bargain.
There i~. so to
speak, an acceptance in escrow, which is not to take
effect until the future.
In the meantime, of course,
.neither party is bound and either may withdraw.
More
over, if the time at which the acceptance was to become
effectual is unreasonably remote, the offer may lapse
before the acceptance becomes effective.
But if neither
party withdraws and the delay is not unreasonable a
contract will arise when the contingency happens or stipulated i;vent occurs"
In this case, it is not the want of communication of the confirmation by the Government to the appellant that really stands
in the way of there being a concluded contract, but .. rather the
want of confirmation by the Government of the eond1tional acceptance by the Divisional Forest Officer.
The appellant's bid was
for Rs. 92,001/-. The acceptance of the bid by the Divisional
Forest Officer was, therefore, subject to confirmation by Government.
The proceedings of the Minister dated November · 27 .•
1970, would show that he did not confirm the acceptance of the
(!) A.LR. 1947, 34 M•dras, 366.
(2) Williston On Contracts, Vol. I, 3rd Ed. Section 77A.
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HARIDWAII. SINGH V, BAGUN SUMBRUI (Mathew, J.)
635
offer·by the Divisional 'Forest Officer.
What the Minister did was
not ·to confirm the acceptance made by the Divisional Forest
Officer, but to accept the offer made by the appellant in his com- ·
munication dated October 26, 1970, that he would take the coup
for the res~ed price of Rs. 95,000/-. T)lere was, therefore, no
confirmation of the acceptance of ihe bid to take tlle
COUP' in
settlement for the amount of Rs. 92,001/-. If the offer that was
accepted was the offer contained in the communication of the
appellant dated October 26, 1970, we do not think that there was
any communication of the acceptance of that offer to the appellant. The telegram sent to the Conservator of Forest, Ha-zeribagh,
by the Government on November 28, 1970, cannot be considered
as a communication of the acceptance of tl)at offer to the appellant.
The acceptance of the-offer was not even put in the course
of transmission to the appellant; and so even assuming that an
acceptance need not come to the knowledge of the· offeror, the
appellant cannot contend that there wa8 a concluded contract on
the basis of his offer contained in his communication dated October 26, 1970, as the acceptance of that offer wa& no,t put in the
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course of transmission.
Quite apart from that,
the appellant
himself revok~d the offer made by him on October 26, 1970, by
his letter dated November 3, 1970; in which he stated that the
coup may be settled upon him at the highest bid made by him in
the auction.
We are, therefore, of the opinion that there was no
concluded contract between the appellant and the Government.
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This t.akes us to the question whether the settlement in favour
of the 61h Respondent was in violation of any statutory rule. The
appellllillt's contention was that the settlement in favour of the 6th
Respondent by a private treaty was in ·violation of the rules of
executive business made under· Article 166(3). Rule 10 of the
Rules provides :
"10(1) No department shall, without previous consultation with the Finance Department, authorise aily
orders (other than orders pursuant to any general or
special delegation made by the Finance Department)
which:
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(a) either immediately or by their repercussion.
will affect the finances of the State, or which,. in particular.
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( i) involve any grant of land or assignment of
revenue or concession, grant, lease or licence of
mineral or forests, rights or a right to water
power of any easement or privilege in respect of
such concession.
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636
SUPREME COURT REPORTS
[1972] 3 s.c.R
(2) Where on a proposal under this rule, prior
consultation with the Finance Department is required,
but on which the Finance Department might not have
agreed, no further action shall be taken on any such
proposal until the cabinet takes a decision to this effect."
A copy of the letter from the Deputy Secretary to the Government of the Accountant General, Bihar, dated November 22, 1967
would show that some relaxation of Rule JO ( l) of the rules of
executive business was made by the Finance Department relating
to lease of forest Coups or forest produce of the value of more
than'Rs. 50,000/-.
That letter read~ as under:
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"Suhjecr : Revision of procedure in issuing any order
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involving any grant of lease, sale or licence
of minerals of forest rights if such order is
issued by the Administrative Department at
the Secretariat level.
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l am directed to say that in relaxation of rule 10 ( 1)
of the Rules of Executive Business, Government have
been pleased to decide that the Forest Department shall
authorise orders sanctioning leases of Forest coups or
produce of the value of more than Rs. 50,000/- (ru~
fifty thousand) each, subject to the following conditions
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that:-
( I ) Reserve price of the coup has been fixed before
auction.
( 2) Highest bid should be accepted.
( 3) Highest bid should not be less than the reserve
price.
( 4) Any relaxation to the above conditions may not
ordinarily be allowed except with the
prior
concurrence of the Finance Department."
Before the High Court the contentions of the 6th Respondent
were, firstly, that the rule 10(1) is not a statutory rule and.
secondly, that it did not concern lease of forest land.
The High
Court, without deciding the question whether the rule is a statutory rule, held that the rule has nothing to. do with the lease of
forest coups and said that there was nothing which prevented th<!
Government from giving the coup on lease by private treaty. The
High Court, therefore, ·held that there was no bar, statutory or
otherwise, to the settlement of the coup in favour of Respondent
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HARIDWAR SINGH V, DAGUN SUMBRUI (Mathew, J.)
637
No. 6 by private negotiation and as such the settlement in his
favour was valid.
Counsel for the appellant argued that the High Court went
wrong in its conclusion that rule 10{1) as.relaxed, did not apply
to the grant of the lease of the coup in question and that it really
prohibited a lease of forest land ·except by public auction.. We
are not satisfied that the construction contended for is correct.
Neither rule 10(1) nor the rule as relaxed says that forest land
can be leased only by public auction.
Rule 10( 1) in so far as
il is relevant to the present case only says that no department shall,
without prior consultation with the Finance Department, authOrise
by any order, the lease or licence of mineral or forests.
The
relaxation made to rule 10 (I) as evidenced by the letter from the
. Deputy Secretary to the Government is to the effect that in .the
case of lease of forest land of the value of more than Rs. 50,000/-.
if made by public auction, it can only be made subject to the
conditions mentioned there.
Jn other words,
rule 10( 1) · as
relaxed does not prohibit the grant of a lease by private treaty.
The rule read in the' context of its relaxation as mentioned in the
letter of the Deputy Secretary would only show that con@ta,fion
with the Finance Department is not necessary for a lease, if the
lease is of lan.d of the value of more than Rs. 50,000/-
and is
granted in pursuance of a _public auction held in conformity 'with
the conditions mentioned in the letter of the Deputy Secretary.
Now the question is whether the coup in· question was settled
in favour of the 6th Respondent in accordance with Rule 10( 1) .
ft is clear from the records relating to the proceedings for- the
grant of the lease· in favour of the 6th Resp0ndent ihat the Finance
Dep.artment was not consulted before the Minister passed
tl1e
order on December 13, 1970, to grant the lease.
But counsel
for the Government of Bihar and 6th Respondent contended that
rule 10( 1), in so far as it requires prior consultation with the
Finance Department, is only directory in character and, therefore.
even if there was no prior consultation, the settlement was valid.
So, the question arises whether rule 10 ( 1) which requires prior
consultation with the Finance Department is mandatory or not.
Several tests have been propounded in decided cases for determining the question whether a provision in a statute, or a rule ;,
mandatory or directory.
No universal rule can be laid down on
·this matter.
Jn each case one must look to the subject matter and
consider the importance of the provision disregarqed and the
relation of that provision to the general object intended to
be
secured.
Prohibitive or negative words can rarely be directory
and are indicative of the intent that the provision is to be mandatory (see Earl T. Crawford.
The Comtructian of Statues, pp.
523-4 ).
638
SUPREME COURT REPORTS
[1972] 3 s.c.R.
. Where a prescription relates to performance of a public duty
A
und to invalidate acts done in neglect of them would work serious
general inconvenience or injustice to persons who have no control
over those entrusted with the duty, such prescription is generally
understoOd as mere instruction for the guidance of those upon
whom the duty is imposed [see Dattatreya Moreshwar. Pangerkar
v. The State of Bombay and others( 1) ].
B
Where, however, a power or authority is conferred with a
direction !hat certain regulation or formality shall be complied
with, it seems neither unjust nor incorrect to exact a rigorous
observance of it as essential to acquisition of the riJ!ht or authority
(see Maxwell, Interpretation of Statutes, 6th ediuon, pp.
649MO).
C
In this case, we think that a power has been given to the
Minister in charge of the Forest Department to do an act which
concerns the revenue of the State and also the rights of individuals.
The negative or prohibitive language of rule 10(1) is a
strong indication of the ·intent to make the rule mandatory. Further, rule 10~2) makes it clear that where prior consultation with
the Finance Department is required for a proposal, . and the
department on consultation, does not agree tQ the proposal, the
department originating the proposal can take no further action on
the proposal.
The cabinet alone would, be competent to take a
docision.
When we see that the disagreement of the Finance
Department with a proposal on consultation, deprives the department originating the proposal of the power to take further action
on it, the only conclusion possible is that prior consultation is an
'"sential pre-requisite to the exercise of the power.
We, therefore, think that the order passed by the Minister of Forest, Gov-
<?rnment of Bihar on December 13, 1970. settling the coup in
favour of the 6th Respondent was bad and we quash the order.
We allow the appeal to the extent indicated but make no order
:1, to costs.
G.C.
Appeal allowed.
D
E
F