CHEPROLU JAGANMOHANA RAO Vs. BHAVANARAYANASWAMY

JUDGEMENT

(1.) This appeal is directed against the judgment and decree dated 24.2.1990 in OS No.1 of 1985 on the file of the Court of Subordinate Judge, Bapatla, wherein the suit filed by the respondent herein for recovery of a sum of Rs.31,750/- towards damages, was decreed with future interest at 6% per annum from the date of decree, till the date of realisation.

(2.) The respondent-temple filed suit with the following averments: The Executive Authority of the plaintiff temple conducted auction on 1.9.1982 for sale of paddy belonging to the temple, after due publication. It was stipulated among other things that at the time of the auction, the highest bidder has to pay 1/3rd of the bid amount including the deposit on conclusion of the auction and that the highest bid is subject to final confirmation and approval by the Commissioner, Endowments and the highest bidder has to take delivery of paddy duly paying the sale price, within three days of the intimation of the approval, or otherwise, the deposit amount is liable to be forfeited. The paddy was sold in two lots of 61 bags of Akkulu variety and 1500 bags of masuri variety. The initial deposit was fixed at Rs.200/- and Rs.500/- respectively for the two varieties. The defendant participated in the auction and he was the highest bidder in respect of 5000 bags of masuri variety of the paddy at the rate of Rs.120/- per bag. The bid being highest was accepted and the sale was knocked in favour of the defendant. At the request of the defendant, the condition regarding the payment of 1/3rd price on the date of auction was also waived. The plaintiff authorities informed the Commissioner, Endowment about the auction and the Commissioner by his proceedings dated 6.9.1982 approved the auction. The plaintiff temple by their notice dated 26.9.1982 called upon the defendant to pay the cost of 1500 bags of paddy within three days and take delivery. As there was no response, the plaintiff addressed another letter dated 6.12.1982 to the defendant, putting him on notice that if he fails to pay the balance amount, and take delivery of paddy of 1500 bags within 30 days, the paddy would be put to sale again besides forfeiting the deposit of Rs.5000/-. The defendant would be liable for any loss that may be occasioned to the plaintiff on account of re-sale of the paddy. The defendant did not pay the balance sale price nor lifted the paddy of 1500 bags. The plaintiff forfeited the initial deposit of Rs.5000/- deposited by the defendant. The resale fetched only at Rs.100/- per bag and thereby caused loss at Rs.20/- per bag to the plaintiff. The plaintiff sustained loss of Rs.30,000/- on account of the re-sale of 1500 bags and after deducting amount of Rs.5000/- forfeited by the plaintiff, the plaintiff filed the suit for balance amount of Rs.25,000/- with interest at 12% per annum.

(3.) The appellant-defendant filed written statement contending in brief as follows: The defendant was intimated of the approval of the auction by the Commissioner on 26.9.1982 i.e., 26 days after the auction. Even then they did not cooperate in getting the paddy weighed inventing some reason or other. Even after issuance of notice dated 6.12.1982 also, the plaintiff authorities did not effect the weighment for taking the delivery stating that the Assistant Commissioner, Endowments was not available. To the reply notice got issued by the plaintiff dated 4.1.1983, the defendant got a reply issued on 3.2.1983. The terms and conditions stipulated in the pamphlet dated 21.8.1982 particularly condition No.3 is to the effect that within 3 days after approval by the Commissioner, Endowments, paddy should be got weighed and taken delivery on payment of balance, failing which the deposit would be liable to be forfeited. No stipulation to make the auction purchaser liable for damages by way of difference of sale price in the event of resale. The deliberate inaction and delay on the part of the plaintiff in effecting delivery of the paddy to the defendant necessitated the re-auction, for which, the defendant is not responsible. The clause for forfeiture of deposit of Rs.5000/- is illegal, as the deposit was made involuntarily in a heat of competition and in anxiety to establish his supremacy. Hence the said deposit of Rs.5000/- is liable to be refunded to the defendant and he is not liable for the suit amount.