KOCHURAMA PANICKER Vs. VARKEY

JUDGEMENT

(1.) The plaintiff is the appellant. The suit was for recovering money due under a chitty conducted by the defendant. The plaintiff's case was there were three classes of chitties conducted by the defendant as foreman. They were earmarked A, B and C class chits. The plaintiff had subscribed to three tickets in A class (4 in B class and 3 in C class) chitties. He had obtained satisfaction in respect of these with the exception of two tickets in A class, 2 in B class and 3 in C class. There were altogether 26 instalments of subscription payable; but the chitty collapsed on the 20th instalment day. All subscriptions have been duly paid by the plaintiff till the 19th instalment day. He had made a successful bid in respect of one of his tickets in the A class chitty on the 19th instalment date. The total investment calculated on the basis of the subscriptions payable by the plaintiff would have been Rs. 1200, but the amount of his bid was only Rs. 989-14-4. This sum had to be paid to him as prize money according to the rules of the chit on the 20th instalment day. But it was not paid, because the chitty collapsed by that time. The point that was urged on behalf of the plaintiff at the trial in respect of this amount of the bid was that since the prize money was not paid to him on the 20th instalment day, he had the option of withdrawing the bid that he had made of Rs. 989-14-4 and he could insist upon the total subscriptions paid by him being refunded to him. This contention did not find favour with the Trial Court which held that there was authority in Travancore for the position that once there was a successful bid at a chit auction, it was not open to the subscriber who had made that bid to go back upon it and claim refund of the subscriptions paid by him. The correctness of this proposition is questioned on behalf of the appellant.

(2.) The point raised on behalf of the plaintiff was the subject matter of additional issue No. 6 framed at the trial which was worded as follows:

(3.) It will be seen from the extract given above that the Trial Court took the view that once the plaintiff has made a successful bid at an auction, it is not open to him to waive his right to claim the prize money and to go back to his right to claim the paid up subscriptions as a subscriber who had not made a successful bid at the auction. On the face of it, the contention urged on behalf of the plaintiff appellant seems to us to be well founded. As already stated, the total amount which the plaintiff could claim in case he had not bid at the auction was Rs. 1200. But he was prepared to forego over Rs. 200 on the basis that on the next instalment day which was the 20th instalment day, he would be paid in cash Rs. 989-14-4. It was in anticipation of obtaining this payment that he was willing to forgo the discount subject to which he had made the bid. But when the forman of the chitty could not pay the prize money to him on the 20th instalment day, the transaction in our view became voidable at the option of the subscriber who then became entitled to say that he was not willing to be regarded as a subscriber who had made a successful bid at the auction, but that he would be content to obtain satisfaction as an ordinary subscriber who could ordinarily claim refund of the subscriptions already paid by him. There are three provisions of the Travancore Contract Act which would support such a contention. The first of these is to be found in S.40 according to which "When a party to a contract has refused to perform, or disabled himself from performing his promise in its entirety, the promisee may put an end to the contract, unless he has signified by words or conduct, his acquiescence in its continuance." In the present case, by the collapse of the chitty on the 20th instalment day, the stake holder disabled himself from performing his promise in its entirety. He was not able to pay the prize money to the plaintiff nor was he able to continue the chit and the plaintiff was thus deprived of the benefit of the discount that would become available to the subscribers generally when other subscribers make their bids at the chit auction. Another provision which can be relied on by the plaintiff is S.55 of the Travancore Contract Act according to which "When a contract consists of reciprocal promises, such that one of them cannot be performed or that is performance cannot be claimed till the other has been performed, and the promisor of the promise last mentioned fails to perform it, such promisor cannot claim the performance of the reciprocal promise, and must make compensation to the other party to the contract for any loss which such other party may sustain by the non performance of the contract." Moreover, in a transaction like the present, in view of the fairly large amount waived by the bidder at the chit action in anticipation of getting the amount of his bid in cash on the next instalment day, time must be regarded as of the essence of the contract and if the stake holder does not perform his promise on the next auction day as agreed to by him, the contract must be deemed to have become voidable at the option of the subscriber, according to S.56 of the Travancore Contract Act. This, in our view, is a case in which the parties must be deemed to have regarded time as of the essence of the contract. The subscriber who makes his bid at an auction does so after making a calculation as to the benefit that he will derive by getting cash on the next instalment day. The amount that he is prepared to waive on the basis of that expectation, he gives up and if when the time arrives for him to reap the benefit of that bid, he does not get the amount, then the whole transaction must be deemed to have become voidable at his option. It is in anticipation of getting the amount on a particular date that he voluntarily waives a portion of the total subscription to the refund of which he would become entitled in case he does not bid. It is really a transaction which is on a par with a commercial contract in which time is prima facie the essence of the transaction and, therefore, we are of the view that the legal contention urged on behalf of the plaintiff is well founded.