V. ALAGAR THEVAR Vs. MADURAI MUNICIPALITY

JUDGEMENT

(1.) THE Madurai Municipality farmed out its right to collect fees in connection with the weekly shandies and annual cattle fair held within its jurisdiction for the year 1962 -63. The auction was held on 6 -3 -1962 and the Council of the Madurai Municipality accepted the defendant's bid of Rs. 70,000 as it was the highest, by its resolution dated 16 -3 -1962. Admittedly the defendant was put in possession of the market from 1 -4 -1962. The defendant executed the agreement Ex. A -1, on 7 -4 -1962. The period during which the defendant could remain in the market for purposes of collecting the fees therefrom is admittedly one year commencing from 1 -4 -1962 and ending with 31 -3 -1963. For purposes of this case one or two salient clauses of the contract may be referred to. In particular, if the contractor fails to perform or observe any of the covenants in the said agreement it shall be lawful for the Municipal Council in addition to and without prejudice to its other rights and remedies, by notice in writing, to determine the agreement or the contract and on such determination the licence granted to the defendant shall cease. It is also provided that it is open to the Executive Authority of the Municipality or the Council of its own volition, on such cancellation, to resell or manage the market departmentally at the risk and cost of the licensee and the licensee (defendant) shall be liable to compensate all losses and damages arising therefrom as per Municipal accounts. It is the common case that the defendant in violation of the terms of Ex. A -1 collected a fee far in excess of the schedule of rates prescribed by the plaintiff and this gave a cause of action to the plaintiff to determine the licence and cancel the contract. Accordingly, the Commissioner, by his proceedings dated 25 -4 -1962, cancelled the contract with effect from 26 -4 -1962, and gave notice to the defendant that the caution deposit of Rs. 500 was being forfeited. Subsequently the action of the Commissioner was approved by the Council in its resolution dated 3 -5 -1962. An appeal by the defendant as provided for against such cancellation to the Council of the Madurai Municipality was unsuccessful. Thereafter the defendant did not question the right of the Council to so cancel the contract as above. An attempt was made by the Madurai Municipality to reauction the right to collect fees in the same market by conducting an auction on 16 -5 -1962, but this proved abortive in the sense that the defendant caused a writ petition to be filed in this court and thwarted the subsequent auction purchaser from effectively conducting the weekly shandy and annual cattle fair. The fact, however, remains that notwithstanding the so -called reauction on 16 -5 -1962, the auction -purchaser, one Karuppanna Thevar, did not run the market which was run departmentally by the Municipality itself. In those circumstances the Municipality had to run the market till the period of the contract was over and at the end of the contract period the damages were reckoned as per the Municipal accounts in the following manner : Particulars of Claim Rs. 70,000 -00 Lease amount due from the defendant Less 1. Amount remitted by the defendant as per M. R. No. 36653/3 -3 -62 Rs. 1,000 -00 - do - as per M. R. No. 26655/3 -3 -62 Rs. 16,003 -00 - do - as per M. R. No. 40607/28 -3 -62 Rs. 35,640 -52

(2.) AMOUNT collected departmentally Rs. 3,563 -05 Less: 10% departmental collection charges Rs. 1,000 -00 Balance Rs. 32,073 -05 Net total of items 1 and 2 Less caution deposit forfeited Rs. 50,079 -47 Rs. 500 -00 Rs. 49,579 -47 Balance Rs. 20,420 -53 Interest for the same from 1 -4 -63 to 10 -6 -65 for 2 years 2 months and ten days at 12% per annum Rs. 5,377 -53 Total Rs. 25,798 -06 The Municipality after appraising the defendant of such damages sustained by it as a result of the wrong committed by the defendant claimed a sum of Rupees 20,420 -53 as and towards actual damages and also interest thereon at the rate of 12 per cent per annum for a period of 2 years 2 months and 10 days amounting to Rs. 5,377 -53. The suit is for the recovery of the said amount with interest. 2. The defendant in his written statement raised various contentions. He would state that the Commissioner had no right to cancel the lease and the contract itself was void because it was not signed by the Commissioner and that in any event the cancellation of the agreement was illegal, void and inoperative. The defendant's case is that far from he being liable to pay any amount by way of damages he is entitled to a refund of the sum of Rs. 17,505 which he paid in the course of his obtaining the contract as above. He has also made a counter claim for this and has paid the necessary court -fee thereon. In any event, the deduction of 10 per cent, as collection charges is said to be a claim without legal basis. The defendant also resisted the claim for interest. On all these grounds the suit was resisted.

(3.) ON the above pleadings the following issues were framed :