AMMINI AMMA Vs. VAIKOM MUNICIPALITY

JUDGEMENT

(1.) Vaikom Municipality, the contesting respondent owns a premises which was being utilised for lodging purposes by the Municipality. It decided to give the privilege of conducting lodging houses in the said premises for which purpose it conducted an auction. The appellant being the highest bidder, she was given the said privilege for three years 1981-82, 1982-83 and 1983-84 subject to the stipulation regarding payment of the licence fee as provided in the agreement Ext. P1 On the ground that that appellant has committed some default ia payment of rent, a notice was issued and the appellant took the stand that at least 4 rooms were not in a habitable condition and that the understanding was that all the rooms should be inhabitable condition. As there is a breach on the part of the Municipality in giving all the rooms in a habitable condition, the appellant took the stand that she has suffered loss. She however offered to pay the arrears of rent and to hand over possession without any further liability on her part. Ultimately the appellant paid the entire amount due up to 31-3-1983 and handed over possession on 30-4-1983 A notice was issued by the municipality under R.32(1) of the Taxation Rules as per Ext. R1(a) requiring the appellant to pay certain amount by way of damages, interest, water charges and miscellaneous expenses. The appellant gave a reply disowning her liability for the same. The appellant was then served with a demand notice as per Ext. P6 issued under R.32(1) of the Taxation Rules wherein it is stated that the movable properties of the appellant would be sold by distraint on the commission of default on the part of the appellant is not paying the amount of damages etc. claimed in the notice issued to her. It is in this background that the appellant approached this court for an appropriate relief in O. P. No. 7907/83.

(2.) The principal contention of the learned counsel for the appellant was that the breach has been committed by the respondent municipality in not performing its part of the contract viz., of giving all the rooms in a habitable condition and that therefore there is frustration of the contract and that the appellant is not liable for any damages. It is only for the purpose of buying places that the appellant, though not liable to pay the arrears claimed by the municipality, paid all the arrears upto 31-3-1984 and also delivered possession on 30-4-1983. It is in this background that it was contended that the municipality cannot be an arbiter in its own case for the purpose of assessing the damages payable by the appellant and recovering the same under R.32(1). The learned single Judge not having accepted the case put forward by the appellant the original petition was dismissed and hence this appeal.

(3.) It is no doubt true that Clause.12 of Ext. P1. the agreement between the parties, provides that if j by breach of the terms and conditions of the agreement, the municipality has to reauction the right to conduct the lodge and if thereby any loss is caused to the municipality, the licensee and her sureties and their properties will be liable for such loss. In this case damages have been claimed from the appellant by the municipality having regard to the low amount of licence fees realised as a result of reauctioning the premises, after the appellant banded over possession of the same to the municipality on 30-4-1983. It was contended by the learned counsel for the municipality that this is a case in which the appellant has agreed to pay the damages and that therefore the authorities are entitled to recover the amount by invoking R.32(1) of the Taxation Rules. It was contended by him that the question of assessment of damages has not arisen in this case. He also submitted that the very fact that the appellant has paid the entire amount of arrears due up to 31-3-1983 and has voluntarily delivered possession makes it clear that she has agreed to abide by the claim of the municipality so far as the damages are concerned. Though the appellant has agreed to pay damages as stipulated in Clause.12 of the agreement Ext. P1, there is no agreement in regard to the quantum of damages, nor is there an agreement on the question as to who must be regarded as being guilty of the breach of contract. The appellant took the stand in her reply to the notice that the contract stood frustrated because of the breach committed by the municipality in not providing all the rooms in a habitable condition. Therefore the stand of the appellant is that it is the municipality that was responsible for committing the breach of the contract in not giving possession of all the rooms in a habitable condition. It is in this background that she has taken the stand that payment of arrears up to. 31-3-1983 was only for the purpose of buying peace and not conceding the claim of the municipality in regard to its entitlement to properties or in regard to quantum of damages. We have no hesitation in rejecting the contention of the learned counsel for the respondent that this is a case in which there is an agreement in regard to the payment of damages. There is no agreement in regard to the question as to whether the appellant is guilty of breach of contract and as to whether the appellant has therefore become liable for damages. There is also no agreement in regard to the quantum of damages payable by the appellant. That being the position, the question is as to whether S.386 of the Kerala Municipalities Act can be involved in this case. The said section reads: