Chet Ram Thakur, J.
1. This writ petition under Articles 226 and 227 of the Constitution of India has been filed by the petitioner firm which deals in forest contracts. Thepetitioner in Sept. 1974 had purchased the right to fell bamboos in forest lot No. 1/74-75 in Kunihar Forest Division in an open auction for Rs. 4,25,000. The area which was auctioned was about 100 acres. The working period of the lease was up to 30-4-1975. The forest authorities granted permission for felling the trees only after about a month of the sanction of the lease. By March 1975, the petitioner could fell trees only from an area of 200 acres. The total out-put worked out was about 500 truck loads. Out of that the petitioner could export only 27 truck loads. By March they had paid an amount of Rs. 2,56.250, The petitioner could not export the entire output due to certain difficulties and therefore requested the respondents to permit them to export the remainder part after the expiry of the working period explaining the difficulties which prevented them from exporting the output within the stipulated period. The respondents did not accept the request and by letter, Annexure P-5, dated 7-3-1975 cancelled the agreement and ordered the seizure of the bamboos extracted by the petitioner. But, subsequently this order was withdrawn.
2. On 29-3-1975 the petitioner again made a request to respondent 3 to grant extension for working out the leased forest upto 30-4-1974 for the reasons mentioned in their letter of request. The representation was recommended by respondent 3 and endorsed by respondent 2 vide Annexure P-8. The representation was accepted and extension was granted up to 30-4-1976 vide Annexure P-10. According to the petitioner after receipt of the extension order, Annexure P-10, they could not start work due to on-set of rains and in the meanwhile the petitioner received another order, dated 19-8-1975, by which the extension granted to the petitioner upto 30-4-1976 had been cancelled. The order is Annexure P-1l. The petitioner again represented to respondents 1 and 2 for withdrawing the order, Annexure P-1l, and to permit them to work in the forest leased out to them. But, it appears that no reply was given and instead the respondents notified the re-auction by order, Annexure P-13, for felling and removal of the felled trees. The petitioner, therefore, have challenged the order of cancellation as also the order of re-auction of the area of felling the bamboos in violation of the principles of natural justice,
3. The submission made by the respondents was that the dispute was onefor which no writ was maintainable. Thedispute has arisen out of a contractualobligation and under Clause 42 of the agreement, the matter was one which couldbe referred only to the arbitrator foradjudication. Clause 42 of the agreementreads as under:
'Except where otherwise provided in the agreement if any question, difference or objections whatsoever shall arise in any way connected with or arising out of or touching this instrument or the meaning or operations of any part thereof or the rights, duties or liabilities of either party shall be referred for arbitration to any Deputy Commissioner in Himachal Pradesh.........'
Clause 3 of the agreement is also relevant for the present purposes. The same gives power to the Conservator of Forests/Chief Conservator of Forests to extend the period of lease laying down such conditions as are necessary to safeguard the forest working, considering the facts on receipt of application by the lessee explaining reasons for not completing the work subject to the condition that the dates of payment of royalty instalments will not be affected. Undoubtedly under Clause 3 of the agreement on the expiry of the lease period the lessee has got no right on the bamboos which are lying standing in the forests and on the felled bamboos and the bamboos un-removed from the leased forest. In the instant case the extension order, Annexure P-10 was passed on 14-4-1975 and time was extended upto 30-4-1976 on payment of Rs. 3,400, but immediately thereafter, the letter, dated 9-8-1975 Annexure P-1l, cancelling the extension was issued. Undoubtedly in terms of Clause 3 respondents had the right to extend the period and which they did subject to the condition that the petitioners were required to pay Rs. 3,400. The petitioners challenge the cancellation order on the ground that this order was passed without affording them adequate opportunity to show cause against the proposed order. The respondents did accede to the request of the petitioner for extension of tune to enable them to fell the bamboos and to export the same and hence a valuable right had accrued in favour of the petitioner. This civil right which had accrued in favour of the petitioner was independent of the contract, though initially the right accrued at thetime of contract but it was independent of the same and that such a civil right which had accrued in their favour could not be cancelled by the respondents without affording adequate opportunity to show cause against the proposed order' and for this reliance was placed on D. F. O. South Kheri v. Ram Sanehi Singh (AIR 1973 SC 205) in which the contention was that the dispute arose out of the terms of the contract and the D.F.O. under the terms of the contract had authority to modify any action taken by a subordinate forest authority, the remedy of the respondent was to institute an action in the civil court and that the writ petition was not maintainable. It was held therein that the order had been passed by a public authority modifying the order or proceedings of a subordinate forest authority which had deprived the contractor of a valuable right and it was, therefore, not possible to hold that merely because the source of the right which the respondent claims was initially in a contract, for obtaining relief against any arbitrary and unlawful action on the part of a public authority, he must resort to a suit and not to a petition by way of a writ. Therefore, on the basis of this authority it is quite evident that although the right had initially accrued in a contract, the extension did really create a civil right in their favour and the right was taken away by the respondents arbitrarily without giving them any adequate opportunity and, therefore, the petitioner could not be dragged to a civil suit and a petition for quashing the arbitrary and unlawful action on the part of the public authority they could maintain a writ petition.
4. The learned counsel for the respondents also relied on Bal Krishan Vaid v. State of Himachal Pradesh. etc., ILR (1974) Him Pra 838 : (AIR 1975 Him Pra 30) this case has got no bearing on the facts of the present case inasmuch as in that case what was challenged was a notice. The contract itself provided that the contract could be cancelled on a notice of 30 days. But, the present is not a contract in such terms. Here the agreement Itself states that it has been entered into in pursuance of the provisions of the Indian Forest Act, as amended, and the rules made thereunder. This is the very opening paragraph of the agreement deed. Therefore, in these circumstances it is a case in which a writ petition is maintainable and not that the petitionershould be directed to refer the matter to the arbitration. There is no provision like Clause 30 of the agreement as in the case of Bal Krishan Vaid (supra) in the present case. Therefore, this is clearly a distinguishable case.
5. The respondents further relied on Har Shankar v. Deputy Excise and Taxation Commr. (AIR 1975 SC 1121). In that case the attack was for impeaching the very contract. But, this is not the case here. Here the case is that the respondents had extended the period and so now they cannot take away that valuable right without conforming to the principles of natural justice. Hence this authority also is not relevant for the present purposes. I am, therefore, of the view that the writ petition is maintainable. The objection raised by the learned counsel that the matter is one which is covered by Clause 42 of the agreement and that the case must be referred to the arbitration and no writ petition is maintainable, is overruled.
6. The next point that has been raised by the petitioner is that no notice was issued to them before the cancellation of the extension order, Annexure P-10 and that the order was in violation of the principles of natural justice and was not sustainable. And in order to support this contention the petitioner again relied on D. F. O. South Kheri, AIR 1973 SC 205 (supra) which says that when the order affects a person's rights to property, the order has still to be made in a manner consonant with the rules of natural justice. In that case the Divisional Forest Officer had set aside the proceedings of a subordinate authority and passed an order which involved the respondent in a considerable loss. The order involved civil consequences and it was held: 'without considering whether the order of the D.F.O. was vitiated because of irrelevant considerations, the order must be set aside that it was contrary to the basic rules of natural justice.'
7. The petitioner further relied on an unreported case entitled Civil Writ No. 3846 of 1971, Lachhaman Singh v. Punjab State decided on 4-1-1972 by the Punjab and Haryana High Court. That was a case of the present petitioner and the facts appear to be quite identical in both the cases. In that case also he had taken a contract for felling bamboos in Ropar and. after the expiry of the normal period of lease further extension was granted which was subsequently cancelled without any notice and affording any opportunity to the petitioner to be heard. He filed a writ petition against that order and it was held in that case also that an order granting certain benefits to a citizen cannot be withdrawn by the State by merely alleging or assuming that the order is invalid. Even if the Government thought it to be so, it had to hear the petitioner before recording such a decision as the petitioner might have convinced the appropriate authority that its impression was wrong and the order of extension was really valid, legal and proper. In the instant case, what has been contended by the respondents is that extension was merely a concession granted by the authorities to the petitioner and that they cannot take any advantage of this concession if they failed to execute the work within the stipulated period or failed to make the payment of the royalty dues and that they were within their right to cancel the extension without any notice. It may be stated here that this submission does not appear to be correct. In the first instance the respondents had not taken up this objection of non-payment of the dues or the extension fee within the stipulated period. This point was raised only in the written note of arguments submitted by the Advocate-General but he had not taken up any plea in the return filed by him. Secondly, in so far as the royalty is concerned the petitioners have been paying the same and, according to them, they had paid Rs. 2,56,000 till March 1975. The action on the part of the respondents for cancellation of the order granting extension is wholly arbitrary. The respondents could not pass any ex parte order when a valuable civil right had accrued in their favour by this extension order and this could be taken away only after having afforded an adequate opportunity to them to show cause why the contract should not be cancelled for non-compliance with the terms of the agreement. The petitioner could have shown some reasonable cause which might have convinced the authorities or for the matter of that the respondents that the petitioners had a genuine cause for not complying with the requirements of the agreement or the extension order. That being so, this order as passed is wholly in violation of the principles of natural justice and the same cannot be sustained. In support of this, I may alsorefer to the State of Orissa v. Dr. (Miss) Binapani Dei, (1967) 2 SCR 625: (AIR 1967 SC 1269) and A.K. Kraipak v. Union of India, 1969 Serv LR 445 : (AIR 1970 SC 150) which also lay down that the principles of natural justice (are attracted in the case of this type. It is not disputed by the respondents that no notice of the proposed action taken by, the impugned order was given to the petitioner. This cancellation order, therefore, having been passed arbitrarily and without adequate opportunity to the petitioner to show cause has prejudiced and influenced the civil rights and on that basis I am of the view that *this order cannot be sustained.
8. In the light of the above, the petition, therefore, succeeds. The orders, Annexures P-1l and 13 which are arbitrary are hereby quashed and it is directed that the respondents shall give proper opportunity to the petitioner before taking any such action. Further, it is ordered that this period which has been taken in the disposal of this petition during which period the contract remained suspended shall be deemed to be an extension for the purpose of execution of the contract work. And further it shall afford another, two months from the date of this order before it can take appropriate action in the matter in accordance with law.