B CHANNABYRE GOWDA Vs. STATE OF MYSORE

JUDGEMENT

(1.) The appellants are the defendants and this appeal is filed against the decree passed by the Principal Civil Judge, Bangalore, in O.S.16/68. The suit filed by the respondent-Slate of Mysore for recovery of Rs.77, 610-7-0 has been, decrced. The plaint allegations are these: The privilege of vending toddy in Hosakota Taluk for the period from 1st July 1934 to 30th June 1955 was auctioned and the first defendant took up the contract of vending toddy and obtained licence therefor agreeeing to pay a monthly rental of Rs. 12,401 and other cesses and deposited two months' rent in advance. Since the 1st defendant was the highest bidder, his bid was accepted. The second defendant stood surety for the due performance of the obligations under the contract by the 1st defendant and executed a bond. The 1st defendant paid the agreed rent upto October 1954 and thereafter committed default in the payment of monthly rent due to the plaintiff. Consequent on the default by the first defendant, the plaintiff exercised its option to hold a fresh sale and notified the re-sale of the privilege of vending toddy, but no re-sale was actually held and the; 1st' defendant continued to exercise the privilege of vending toddy till the end of the lease period. The plaintifl was> also entitled under the Rules to collect the dues fay distraining the daily sale proceeds realised by the 1st defendant at the spot, and by such attachment, a sum of Rs. 1731-14-6 was colected and adjusted towards the arrears of rent. After adjusting the said sum and the security deposit, the 1st defendant became due in a, sum of Rs.77,610-7-0 including the cesses due and the interest at 6 1/4 upto 1-1-56. The defendants filed separate written statements. The 1st defendant admitted having taken up the right of vending toddy, but he denied his liability to pay the other cesses. He alleged that only Rs.62,005 would be the correct amount in item(i) of the plaint claim and not Rs.64,989-12-9. He also contended that the Deputy Commissioner executed an agreement in favour of the defendant, that the said document remained with the plaintiff and that the alleged contract is illegal and void as the Deputy Commissoner had no power to enter into the contract on behalf of the State as contemplated under law. He therefore denied his liability to pay any part of the suit claim. The second defendant also denied his liability contending that he was not a party to the contract between the 1st defendant and the plaintiff. In the reply statement, the plaintiff denied that the Deputy Commissioner had entered into any written contract with the defendants. Issues were framed and evidence was recorded. On 31-10-60, the suit was decreed in favour of the plaintiff. The defendants appealed to the High Court in R.A.156 /61 and R.A.157/61. On 7th June 1966, the appeals were allowed by consent of all the parties and the suit was remanded to the lower Court with the direction that it should be tried de novo, the parties were allowed to amend their pladihgs and to lead such further evidence as they chose to, and the evidence which had already been recorded was to be treated as part of the record in the case. After remand, the plaintiff applied for amendment of the plaint. On 1G-10-1968, the amendment was allowed. The additional contention taken by the plaintiff was that if the Court comes to the conclusion that the agreement entered into with the 1st defendant is void under the provisions of Art.229 of the Constitution of India, the plaintiff is entitled to the sum claimed in the plaint as compensation under S.70 of the Contract Act. It was stated that since the act of conferring the privilege to sell toddy by the defendant was not intended to be done gratuitously and since "the defendant has enjoyed all the benefits thereof, the defendant is bound to pay compensation to the plaintiff and that the said compensation would be Rs.77,610-7-0. The order of 16-10- l968 gave time for amendment of the plaint as well as for additional written statement of the defendants till 21-10-68. On 21-10-68, the second defendant's Counsel prayed for time to file the additional written statement. Time was given till 28-10-68. Sinco the Judge was on casual leave on 28-10-68, the case was adjourned to 11-11-68. On that date, the defendants and their Counsel were absent. Since there was no additional written statement filed the Court observed that there is no additional issue framed and posted the case for evidence to 21-11-68. After several adjournments, on 19-6-1969 both sides filed memos stating that there was no more evidence. Thereupon, the case was posted for arguments to 25-6- 1969 on which date, arguments were heard and judgment was pronounced on 30-6-1969, decreeing the suit.

(2.) The issues framed are the following :

(3.) In the lower Court, at the time of arguments, it was not contended for the plaintiff that the contract was in accordance with law. The lower Court, therefore, proceeded to consider the plaintiffs claim under S.70 of the Indian Contract Act. It came to the conclusion that the agreed amount of monthly rental should be deemed to be the benefit retained by the defendants which they are liable to pay to the plaintiff and that under S.70 of the Contract Act, the defendants are liable for the suit claim. It further held that even though the surety bond executed by the second defendant was not registered, that circumstance would not affect the debt and the personal covenant contained in the document and that both the defendants are liable for the suit claim,