1982 (3) TMI 259 - SC - Indian Laws

Supreme Court upholds forest auction cancellation based on auction conditions, policy considerations, and legislative intent.

The Supreme Court held that the Government had the right to cancel the auction of forest lots as per the auction conditions, which allowed for provisional ... - Issues Involved:1. Validity of the Government's decision to cancel the auction of forest lots.2. Whether the Government's decision was arbitrary and lacked stated reasons.3. Compliance with legislative policy regarding forest lot allotment.Summary:1. Validity of the Government's decision to cancel the auction of forest lots:The Supreme Court held that the conditions of auction made it clear that the Government was under no obligation to accept the highest bid, and no rights accrued to the bidder merely because his bid happened to be the highest. Condition No. 10 expressly provided that the acceptance of the bid at the time of auction was provisional and subject to ratification by the State Government. The Government had the right, for good and sufficient reason, not to accept the highest bid and even to prefer a tenderer other than the highest bidder. The Court noted that the Government could change its policy from time to time, and a change or revision of policy subsequent to the provisional acceptance of the bid but before its final acceptance was a sound enough reason for the Government's refusal to accept the highest bid at an auction.2. Whether the Government's decision was arbitrary and lacked stated reasons:The Supreme Court found that the High Court had misdirected itself by holding that the Government could not refuse to accept the highest bid except on the ground of inadequacy of the bid. The Court emphasized that there could be a variety of good and sufficient reasons, apart from inadequacy of bids, which might impel the Government not to accept the highest bid. The Court also noted that the Government's decision to cancel the auction and allot the forest lots to the Forest Corporation was in implementation of the policy laid down by the legislature when it passed the Uttar Pradesh Forest Corporation Act. The Court held that the decision of the Government was not arbitrary, as the bids were fantastically high and suspect, and the State was equally interested in the preservation and development of forests.3. Compliance with legislative policy regarding forest lot allotment:The Supreme Court observed that the legislative policy, which the Government was bound to implement sooner or later, was clearly against the auction of forest lots and in favor of allotment of the lots to the Forest Corporation. The Court noted that the Government's decision to cancel the auction and allot the forest lots to the Forest Corporation was in conformity with legislative policy and earlier decisions taken by the Government to implement the legislative policy. The Court concluded that the decision of the Government was a reversion to a policy decision already taken and was a good and sufficient reason for setting aside the auction.Conclusion:The Supreme Court allowed the appeals, set aside the judgment of the High Court, and dismissed the Writ Petition, holding that the Government's decision to cancel the auction and allot the forest lots to the Forest Corporation was valid, not arbitrary, and in compliance with legislative policy.