TELLICHERRY MUNICIPAL COUNCIL Vs. SAMSU

JUDGEMENT

(1.) The only question for decision in this second appeal, at the instance of the plaintiff the Tellicherry Municipality, is as to whether there is a concluded contract between the plaintiff and the defendant on the acceptance by the plaintiff of the defendant's bid at an auction held by the Municipality of the right to conduct trade in a bunk shop belonging to it. The suit is for damages, Rs. 2,331.70 Ps., for breach of contract committed by the defendant. The Trial Court held that there is a valid contract between the parties, the defendant has committed breach of the contract and decreed the suit for damages as prayed for. In appeal, by the defendant, the lower appellate court reversed the decision of the Trial Court and dismissed the suit on its finding that there is no concluded contract between the parties.

(2.) The facts of the case are not in dispute. The plaintiff - Tellicherry Municipality notified sale by auction of the right to conduct trade in four bunk shops newly constructed at the Municipal Bus Stand for the period from 1-7-1972 to 31-3-1974. Ext. Al dated 7-6-1972 is the auction notice. The defendant participated at the auction held on 20-6-1972 and was the highest bidder in regard to bunk No. 4, his bid being for rental at the rate of Rs. 10.30 per day. The bid was accepted by the plaintiff-Municipality as per its resolution dated 27-6-1972 and communicated to the defendant on 28-6-1972. The defendant was required to deposit Rs. 1,500/- as security, pay 4 months' rent in advance and execute a formal agreement. He paid the advance rent demanded and submitted a representation Ext. A4 dated 5-7-1972, addressed to the Chairman of the plaintiff-Municipality. Ext. A4 refers to the defendant's bid on rental at the rate of Rs. 10.30 per day and the deposit of the advance rent. It refers also to the letter dated 28-6-1972 of the Commissioner, Tellicherry Municipality, intimating the defendant of the acceptance of his bid and requiring him to remit the security deposit and execute a formal agreement before 30-6-1972 and take charge of the bunk on 1-7-1972. Ext. A4 contains a request to the Chairman of the Municipality to grant the defendant remission of rent for the period until the commencement of Onam season and also to grant extension of time till 1st October, 1972 for payment of rent and to remit the security deposit. It is stated in Ext. A4 that the defendant bid at the auction under the bona fide belief that he will be able to secure a good business at the bus stand, but to his dismay it is found that no buses are parked at the bus stand and there is not much scope for business at the bunk shop until the Onam season commences. The Municipality issued Ext. A3 notice dated 6-7-1972 to the defendant requiring him to remit the security deposit of Rs. 1,500/-, and execute the formal agreement within 24 hours after the receipt of the notice failing which the defendant was told that the bunk will be reauctioned at his risk and loss. Ext. A6 dated 3-8-1972 is a further notice issued by the Municipality to the defendant informing him that for the reason of his failure to comply with the terms of the contract there will be reauction of the bunk shop at 3 p. m. on 17-8-1972 at his risk and loss. Exts. A5 and A14 are the public notices of reauction and Ext. A7 is the notice published in the Mathrubhoomi daily. Reauction was held on 17-8-1972, as notified. Ext.A15 is the bidders' list which would show that the highest bid was on rental at the rate of Rs. 3. 25 per day. The Municipal Council finding the rent too low, did not accept the bid and resolved to conduct a further auction. Ext. A13 is the notice of auction to be held on 12-9-1972. Ext. A17 is the notice published in Mathrubhoomi daily. Ext.A18 is the list of bidders at the auction held on 12-9-1972. The highest bid on rental at the rate of Rs. 5.50 per day was accepted. The suit is for the loss sustained by the Municipality based on the difference in the rate of rent at which the Municipality was obliged to let the shop after adjusting the 4 months' rent advance paid by the defendant.

(3.) The defendant denied his liability for damages. His contention is that there is no concluded contract and that the bunk was not ready for occupation with effect from the date on which he was asked to take possession of the same. The defendant has no case that in case it is found that there is a concluded contract and be is guilty of breach of contract, the quantum of damages claimed is excessive. Relying on the evidence of pw. 1, a clerk of the Municipality, the Trial Court found that the bunk was ready for occupation on 1-7-1972. The contention that it was not ready for occupation was not pursued by the defendant and no such question is raised before me.