DEVASSYA Vs. ASST EXCISE COMMR

JUDGEMENT

(1.) The petitioners had obtained the privilege for sale of arrack in five arrack shops of the Poonjar range for the year 1984-85 being the highest bidders at a public auction held in that behalf. The petitioners were joint bidders and the price at which the privilege was conferred on them was for Rs. 7,00,000/- payable in ten equal monthly instalments. The requisite licences were issued to the petitioners and they carried on the trade in arrack for the entire period. The conditions of the auction clearly specified the quantity of arrack to be supplied for each of the shops. There was also a clause empowering the Assistant Excise Commissioner to allot larger quantity of arrack over and above the stipulated quantity. It is the petitioners' case that for failure of the Department to supply the requisite quantity of arrack, they had not been able to carry on the trade profitably, they hod, in fact, sustained loss, and for that reason they are not liable to pay the balance amount due as per the terms of the agreements entered into on their bids having been accepted by the department. This contention is raised for the first time in this writ petition after the contracts had been performed and the period of the contract is over.

(2.) According to the petitioners they have paid a sum of Rs. 5,60,000/- towards their liability for Rs. 7,00,000/- and the balance, even though due, is not payable for the failure of the department to supply the extra quantity of arrack, over and above the stipulated quantity.

(3.) Counsel for the petitioners relies on the decision of the Supreme Court in Central Inland Water Transport Corpon. v. Brojo Nath Ganguly 1986 (3) SCC 156 in support of the proposition that the test of reasonableness or fairness of a clause in a contract would depend on the question whether the parties to the contract bad equal bargaining power. According to the learned counsel, the State having a monopoly in regard to the manufacture and sale of liquor was in a domineering position and it cannot be said that the State and the petitioners had equal bargaining power. I do not see any force in this contention. The decision of the Supreme Court referred to above related to the case of a contract of labour where the employee had no choice except to accept the employment on the terms offered by the employer. One of the terms of the employment for termination of the services of the employee was found to be unconscionable and not enforceable against him. It was also held that under the circumstances such a term of the contract of employment issued in the form of a rule was also opposed to Art.14 of the Constitution In the present case the terms and conditions of the auction were published in advance and every bidder participating at the auction knows the terms and conditions upon which the auction is held. He should, at any rate, be presumed to know such terms and conditions under which the auction is held. One of the terms which is also incorporated in the agreement between the parties is for supply of arrack to each of the shops at the stipulated quantity. It is open to the Assistant Excise Commissioner to allot a larger quantity over and above the stipulated quantity if sufficient stock of arrack is available at the depots of the Government. As per these terms and conditions the petitioners are not entitled to get any extra quantity. They have no case that the stipulated quantity bad not been supplied. Counsel relies on the decision of a Division Bench of this Court in Issac v. Asst Excise Commissioner ( 1984 KLT 88 ) and contends that for the failure of the Department to supply extra quantity of arrack, the balance amount due as per the contracts between the petitioners and the Government is not recoverable. The terms and conditions of the agreement dealt with in that case are different from the terms and conditions of the agreements between the parties in the present case. As was noticed in Krishnan v. State of Kerala ( 1985 KLT 1159 ), the terms and conditions had been altered as per G. O. (MS) 31084/TD dated 22nd February 1984 and the agreements between the parties in the present case are in the altered form. There is no term of the contract that obligates the State to supply arrack in excess of the stipulated quantity. The mere fact that a clause in the contract authorises the Assistant Excise Commissioner to allot a larger quantity than the quantity stipulated for supply to each of these arrack shops does not entitle the petitioners to demand for more and for failure of supply of the extra quantity to desist payment of the instalments due under the respective agreements. I do not also see any force in the submission that the State was in a domineering position and the petitioners did not have an equal bargaining power. They had participated along with others in the public auctions held for sale of the privilege of vending arrack in the shops concerned as licensees of the Government. The terms and conditions of the auction were published well in advance and the agreements entered into between the parties are in conformity with those published terms. Having participated at such a public auction on such terms and conditions, it is not open to the petitioners now to contend after the period of the contract and after the contract itself had been performed that it was an unconscionable contract to resist enforcement of the liability arising therefrom. I see no merit in this writ petition.