JUGALKISHORE ASATI Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) THIS is plaintiff's appeal against the dismissal of the suit with costs for damages and interest by the District Judge, Balaghat. The only relief granted is that the plaintiff is entitled to adjustment of an amount of Rs. 2391.20p. towards the last defaulted instalment and the defendant is restrained from recovering the amount so paid from the plaintiff.

(2.) THE plaintiff is a forest contractor. In a public auction held on 3-8-1949 the plaintiff acquired right to extract, collect and remove all the Harra grown in Government forest of Lamta, Baihar and Shupkhar ranges, a part of Balaghat range, Raiyatwari, Minhai forest and unoccupied lands lying within the boundaries of the said forest ranges and areas under the management of Irrigation and Veterinary Departments within the said forest ranges. THE indenture was signed by the Forest Secretary of the Forest Department of the defendant on 14-1-1950. THE period of lease was from 30-1-1949 to 30-6-1952 as per Ex. B.-1. THE consideration of Rs. 1,66,500/-was payable in six instalments each instalment being of Rs. 27,750/-. THE last instalment fell due on 1-1-1952 and the plaintiff defaulted in paying this instalment. THE D.F.O. by his letter Ex. D. 5 dated 20-2-1952 issued a revenue recovery certificate to the Tahsildar for recovery of the last instalment from the plaintiff. Copies of this letter were endorsed to the Range Officers with direction that they should stop working of the forest contract by the plaintiff till the production of a challan showing payment of the last instalment. THE plaintiff moved the D.F.O. for extension of time to pay the last instalment and for stay of further proceedings against him. THE D.F.O. by his letter dated 4-3-1952 stayed recovery proceedings before Tahsildar till 20-3-1952. THE plaintiff's application was forwarded to the Conservator of Forest who returned the same as being unstamped. In the meanwhile, the plaintiff moved several applications for postponement of recovery proceedings and offered to pledge stock of about 1 lac maunds of Harra as security towards payment of the last instalment. Vide Ex. P. 14 dated 16-4-1952 the plaintiff applied to the Secretary of the Forest Department for extension of time to pay the last instalment and also for extension of the contract period. THE secretary by his memo Ex-P. 21 dated 196-1952 rejected the plaintiff's prayer for extension of the contract period but granted him time till 30-6-1952 to pay the last instalment. This letter was communicated to the plaintiff by D. F. O. by his memo Ex. P. 22 dated 27-61952. THEreafter, as per Clause No. 9 of the indenture the plaintiff referred the dispute to the sole arbitration of the Board of Revenue vide Ex. P. 2 dated 14-81952, THE defendant made appearance before the Board and contested the claim and insisted on enforcement of the arbitration clause. However, on 7-41961 the Board of Revenue declined to arbitrate in the matter expressing its inability because of the load of regular work in the Board. THE plaintiff then served a notice Ex. P. 26 dated 20-6-1961 asking the defendant to concur in the appointment of another arbitrator. Since no reply was received, the plaintiff applied under Section 8 of the Arbitration Act, 1940, on 3-8-1961 for substitution of another arbitrator. THE application was contested by the defendant. Finally the application was rejected by the Additional District Judge, Balaghat, on 24-8-1962 vide Ex. D. 3. THE plaintiff then sent a notice under Section 80 C. P. C. on 20-11-1962 vide Ex P. 27 claiming Rs. 75,928.33p. as damages along with interest for the wrongful act of the defendant and its servants and then filed the present suit on 23-9-1963.

(3.) THE defendant contested the suit and submitted that the plaintiff's claim is hopelessly barred by time. THE arbitrator became functus officio after 4 months of entering into reference under Rule 3 of Schedule 1 of the Arbitration Act. THErefore, there was no question of exclusion of the period after expiry of 4 months taken before the Board of Revenue. Moreover, the arbitrator not being a Civil Court, time spent in the proceeding before the Board cannot be excluded under Section 14 of the Limitation Act. This apart, the plaintiff having defaulted in paying the last instalment, he committed breach of contract and he had no right to seek extension of time for payment of the instalment or extension of the contract period. Time of payment being essence of contract, the plaintiff lost all his right under the contract. THE D.F.O., under the circumstances, was justified in issuing instructions to the Range Officers to check movement of Harra outside the contract area, the defendant having 'unpaid seller's lien' on the Harra. THE season for collection of Harra starts from November and ends by February. THE plaintiff had already collected all the Harra before the D. F.O. issued instructions to the Range Officers. Besides, the plaintiff was in financial stringency and he had himself suspended further collection and transportation of Harra. THE defendant also disputed the quantity of collected and un-collected Harra lying within the contract area as claimed by the plaintiff. THE defendant was entitled to claim interest at the rate of 6.25% per annum on the amount of the last instalment which fell due on 1-1-1952. THE suit was, therefore, liable to be dismissed with costs.