KUNJUKRISHNAN Vs. STATE OF KERALA

JUDGEMENT

(1.) Plaintiff is the appellant. The suit was one for declaration that Ext. B4 agreement entered into by the plaintiff with the 3rd defendant on 20-11-1975 and Clause.8 of Ext. B-1 sale notification issued by the 3rd defendant regarding the sale of residual tree growth from the plaint coupe were unenforceable in law and that the plaintiff was not liable to pay any amount to the defendants on the basis of the said agreement or Clause.8 of the sale notice; and also for a perpetual injunction restraining the defendants from recovering the amount mentioned in the notices issued OB 9-6-1976 (Ext. A-1) by the 3rd defendant by invoking the provisions of the Revenue Recovery Act or from appropriating the amount deposited by the plaintiff with 3rd defendant on 30-11- 1975 as part of the earnest money. As a consequential relief the plaintiff also prayed for a decree to recover a sum of Rs. 13,640/- together with interest on the principal amount of Rs. 13,000/- from 7-10-1976 till realisation at the date of 7% per annum. The further relief sought in the suit was for the recovery of the movables described in Schedule.11 to the plaint, in case the defendants fail to deliver those movables, the plaintiff was to be given a decree for recovery of a sum of Rs. 13,510/- being the value thereof,

(2.) The material allegations in the plaint, relevant for the purpose of this appeal, could be stated as follows:-- Sub-coupe No, 1 of Anakkulam Coupe No. 5 in Ancfaal Range of Punalur Forest Division was vested with the 1st defendant, the State of Kerala and was under the control and supervision of defendants 2 and 3 (the Circle Conservator of Forests, Quilon, and the Divisional Forest Officer, Punalur, respectively) during the material time. The 3rd defendant sold the right to collect and remove all the residuary tree growth in the plaint coupe on 20-11-1975 by public auction. The conditions of sale are set forth in the notification published by the 3rd defendant on 11-10-1975 (Ext. B-1) of which Ext. B-2 was the gazette publication. As per the terms of this notification, the 3rd defendant was to accept the bid, and the 2nd defendant was to confirm the acceptance for completing the contract of sale. The timber and firewood had to be removed from the coupe before 31-3-1976. On acceptance of the bid by the 3rd defendant, the successful bidder had to deposit Rs. 10,000/- or 1/3 of the bid amount whichever is less as part payment of earnest money. The bidder had also to execute an agreement with the 3rd defendant providing that the bidder would not withdraw the bid before confirmation of the acceptance by the 2nd defendant. On confirmation by the 2nd defendant, the bidder would deposit one third of the bid amount as earnest money and execute a formal agreement with the State incorporating the terms and conditions governing the contract of sale. In the auction held on 20-11-1975 the plaintiff participated and bid the coupe for Rs. 2,09,000/-. Since the plaintiff's bid was the highest, the 3rd defendant accepted it, subject to confirmation by the second defendant. The plaintiff deposited Rs. 10,000/- with the 3rd defendant as per the terms of the notification. The plaintiff also executed an agreement with the 3rd defendant agreeing to execute a formal agreement with the 1st defendant after the acceptance of the bid was confirmed by the 2nd defendant. As per the terms of the agreement, if the plaintiff failed to execute the formal agreement the 1st defendant shall have the power and authority to recover from the plaintiff any loss or damage caused to the Government as might be determined by the Government. The Government could also recover the loss or damage by appropriating the above earnest money deposited by the plaintiff and if that was found inadequate, the balance could be recovered from the plaintiff and his properties under the Revenue Recovery Act, the 2nd defendant confirmed the acceptance of plaintiff's bid by the 3rd defendant as per his proceedings dated 10-12-1975 (Ext. B-5). The confirmation of acceptance was communicated to the plaintiff on 20-12-1975. On 19-12-1975 the 3rd defendant had sold by public auction the residuary growth from 19 coupes in Punalur Division. The timber worth Rs. 17, 28, 300/- was sold from the coupe. Timber from these coupes was also directed to be removed before 31-3-1976. Between 20-11-1975 and 20-12-1975 timber worth about 50 lakhs of rupees was sold from the neighbouring divisions of Konny and Kulathupuzha; and such a large scale sale of limber from Government Forests bad never taken place any time before that. The result was that there was heavy slump in the price of timber and firewood. During this period the Government of Tamil Nadu also promulgated orders under the Essential Commodities Act. fixing the maximum price of firewood at Rs. 90/- per ton. This caused a further decline in the price of timber and firewood. This was not a situation contemplated at the time when the plaintiff bid in auction. It was humanly impossible for the plaintiff to sell timber from the plaint coupe within 31-3-1976. There were no bidders at the several auctions conducted by the defendants subsequent to 20-12-1975. The plaintiff and other persons who bid at the auction held on 10-11-1975 represented to the defendant for extension of the term by 10 months as a condition for executing the formal agreement. No reply was given by the defendants. As the plaintiff did not execute the formal agreement, on 20-2-1976 the 3rd defendant issued a notice to the plaintiff intimating him that if he did not execute the formal agreement by 27-2-1976, the residuary tree growth from the plaint coupe would be resold by public auction. The plaintiff was also intimated that the part of the earnest money deposited by him would be forfeited, and the loss, if any, sustained by the 1st defendant as a result of the resale would be recovered from him.

(3.) In their written statement defendants 1 to 3 contended that the suit was not maintainable either in law or on facts. The right, title and interest over sub-coupe 1 of Anakulam coupe No. 5 in Anchal Range scheduled in the plaint get vested in Sri S. Prasanna Kumar who bid it in resale conducted on 30-3-1976. The right of removal of residual growth was exercised by him on the basis of the agreement executed on 22-6-1976. The sale in which the plaintiff participated took place on 20-11-1975. The terms and conditions of the sale were as published in the Kerala Gazette on 28-10-1975 as notice No. PAI.662/75 dated 11-10-1975. Short notices were also published in two prominent Malayalam dailies, Malayala Manorama dated 3-11-1975 and Kerala Kaumudi dated 2-11-1975. The above notices were signed, and were accepted by all the bidders who participated in the sale. After the acceptance of the bid by the 3rd defendant the plaintiff on 20-11-1975 executed a bond undertaking to abide by the terms and conditions of the sale notification. Subject to confirmation by the 2nd defendant the plaintiff's bid for Rs. 2,09,000/- was provisionally accepted by the 3rd defendant. The plaintiff deposited Rs. 10,000/- as a part payment of the earnest money. He had executed an agreement with the 3rd defendant agreeing to execute a formal agreement with the 1st defendant. As per the terms incorporated in the bond executed by the plaintiff he was liable to the respondents for all the loss incurred by the 1st defendant due to laches on his part. R. R. proceedings sought to be enforced were legal, and could not be questioned by the plaintiff. The acceptance of the plaintiffs bid by the 3rd defendant was confirmed by the 2nd defendant, and It was communicated to the plaintiff on 15-12-1975 (Ext. B-6). The plaintiff acknowledged it on 18-12-1975 (Ext. B-8). After the auction dated 20-11-1975, 17 sub-coupes of Punalur Division were sold on 19-12-1975, one sub-coupe on 8-1-1976 and 10 sub-coupes on 20-1-1976. The bidders including the plaintiff who participated in the auction on 20-11-1975 relating to the plaint coupe were fully aware of the probable sale of coupes coming up for sale subsequently. No assurance was given to the plaintiff that no further coupe would be sold. During the previous years also several coupes were sold one after another. The statistics regarding the sale of timber given in the plaint were not correct. The defendants were not responsible for the fall in price of timber or firewood. The plaintiff had not made any earnest attempt to perform his part of the agreement of sale. Several other bidders who bid other sub-coupes on 20-11-1975 along with the plaintiff had executed the agreements as they were bound to do, collected and removed the limber and firewood within the stipulated time and successfully completed the contracts. There was no information regarding the representation referred to in para 12 of the plaint. Even if there was any representation there was no provision for granting extension of time for a period of 10 months. The failure of the plaintiff to execute the agreement was in violation of the terms of sale notification and the bond already executed by him immediately after the sale. A sum of Rs. 70,800/- towards the loss resulting from resale and Rs. 600.77 towards advertising charges for the resale notification were due to the 1st defendant from the plaintiff. Steps were initiated for recovery of this amount from the plaintiff under the Revenue Recovery Act. After appropriating the earnest money of Rs. 10,000/- the balance to be realised was Rs. 61,400.77. Out of this amount, a sum of Rs. 13,512.80 had already been recovered and the balance at present was only Rs. 47,887.97. The 3rd defendant was an authorised agent of the 1st defendant and action taken by him was legal and valid. The agreement entered into by the plaintiff with the 3rd defendant on 20-11-1975 was enforceable. Clause.8 of the sale notice; was also enforceable by the defendants. It was supported by consideration and was valid. The 3rd defendant was authorised by the Government in Notification No. 82347/MS/55/PD dated 3-11-1965 and 695030/MS/64/PD dated 22-2-65 to enter into agreement on behalf of the Government. The agreement was executed on behalf of the Government in the name of the Governor as per the provisions of Art.299 of the Constitution of India, In Clause.17 of the sale notification it was made clear that a draft of the agreement was available in the office, that the bidders might get themselves acquainted with the conditions of sale before participating in the sale and that any complaint raised afterwards regarding the conditions in the sale notice or draft agreement would not be accepted. The terms were quite clear and the plaintiff had made himself acquainted with them. The contract of sale was complete as soon as the offer made by the plaintiff was accepted by the competent authority and the acceptance was communicated to him. It was not correct to say that the acceptance became complete only when the execution of the agreement, which was a subsequent event, took place. Once the acceptance was complete, it was not open to any of the contracting parties to withdraw from the offer. The plaintiff had no right to withdraw at that stage. As per the existing rules there was no provision to extend the period for removal of timber by 10 months. As per the contract, the right to resale the coupe without formally cancelling the contract, was reserved with the defendants. No notice was contemplated for that purpose. The 3rd defendant through notice dated 24-3-1976 (Ext. B-12) informed the plaintiff about the reauction of the coupe at his risk and loss. The 2nd defendant had already confirmed the sale as per the provisions of the notification and it was duly communicated to the plaintiff by the 3rd defendant. As per his letter QC2-3095/76 dated 24-2-1976 the 2nd defendant authorised the 3rd defendant to reauction the coupe. The allegation that the contract was frustrated by action of the defendants was not correct. The plaintiff had no reason to believe that there would not be any further sale of the coupe during the current year. The loss or damage for which the plaintiff was made liable was determined on the basis of the terms and conditions contained in the sale notification and also in the written agreement dated 20-11-1975. Since the obligation of the contracting parties was definite, there was nothing unconscionable about it. There was no cause of action as against the defendants. The plaintiff was the auction purchaser of coupe No. 2 of Oil Plantation. He successfully performed his part of the contract and was eligible for repayment of the earnest money. The total amount due to the plaintiff on that ground including interest up to 13-10-1976 was Rs. 13,647.80. The liability of the plaintiff at the relevant period amounted to Rs. 145/-. The balance amount of Rs. 13,512.80 was adjusted towards the liability in the instant case. An amount of Rs. 10,000/- deposited by the plaintiff on 20-11-1975 was credited earlier, An amount of Rs. 47,887.97 was due from the plaintiff. The attachment of movables shown in the plaint was admitted. The movables were attached with due notice and as provided in the Revenue Recovery Act by the Tahsildar, Quiloa, who was authorised by the District Collector for realising the arrears due to the State. The plaintiff could recover the movables on payment of the dues for which the attachment was effected. The plaintiff's suit was mainly for declaration that the agreement entered into by him with the 3rd defendant on 20-11-1975 (Ext. B-4) and Clause.8 of the sale notification (Ext. B-1) arc unenforceable. This requires court fee on the market value under S.25(d) of the Court fees and Suits Valuation Act. The prayer for setting aside the attachment of movables was not an ancillary relief. For that relief plaintiff had to pay court fee under S.41. The plaintiff was not entitled to any relief.