S. MUTHIAH THEVAR Vs. STATE OF MADRAS, REPRESENTED BY THE DISTRICT COLLECTOR OF MADURAI

JUDGEMENT

(1.) The plaintiff in O.S. No. 253 of 1966 on the file of the Court of the Subordinate Judge of Madurai, is the appellant. He filed a suit for the recovery of the sum of Rs. 8440/ - consisting of Rs. 8000/ - towards principal and Rs. 440/ - being interest at 12 per cent per annum for 5 1/2 months from 27th May 1966 till date of plaint, and in addition for damages said to have been suffered by him end estimated by him at Rs. 2,000/ -. The plaintiff is a Forest Contractor carrying on business at Rajapalayam, Ramanathapuram District. Under Ex. B -1 an auction for lease of quarrying rights in Parayanmalai quarry of Madurai Taluk, Thirupparankundram Village, for a period of five years from 1st July 1966 to 30th June 1971 was proposed to be held on 26th May 1966. The Tahsildar, Madurai Taluk, conducted the said auction on behalf of the defendant who is the State of Madras represented by the District Collector, Madurai. Admittedly, the plaintiff was the highest bidder, his offer being Rs. 79,750/ -. It is common ground that under the terms as notified in Ex. B -1, the highest bid provisionally accepted by the Tahsildar would be subject to the approval by the Collector. It is also not in dispute that under the terms of the auction notice the plaintiff was to pay 1/10th of the bid amount towards security deposit, which obviously means a deposit for the due performance of the contract. The plaintiff did deposit the said amount as required on 27th May 1966 as is seen from Ex. A -1 . According to the plaintiff he was expecting the delivery of the quarry site by 1st July 1966 and contemporaneously anticipated that this highest bid would be accepted by then. It is seen from the record that petitions were received under Exs. B -3 and B -5 from third parties stating that they were prepared to pay a higher offer towards the lease and wanted the Collector as the ultimate authority to reconsider the matter and issue necessary orders for a re -auction, if necessary. Consequent upon the receipt of such petitions from third parties, there was delay in the disposal of the subject by the Collector. The plaintiff reminded the Collector of the District through the Tahsildar and other Officers of the urgency in the matter and felt that as there was no satisfactory response, there was no chance of his offer as evidence by his highest bid in the auction being accepted. He, therefore, under Ex. A -4 d . 19th July 1966 followed up by Ex. A -6 d. 30th July 1966 revoked his offer and called upon the defendant to refund the security deposit of Rs. 8000. The Collector in the meantime, rejected the petition filed by third parties, and under Ex. B -6, d. 27th July 1966 accepted the plaintiff's highest bid. The plaintiff's case is that he did not receive said communication till 9th August 1966. As the plaintiff felt that the defendant was not inclined to accept his revocation and refund his deposit, he has come to court claiming the aforesaid amounts, including in his claim a sum of Rs. 2,000 said to be his loss of profits caused to him by the delay in considering his offer and by reason of the lease site not having been handed over to him on or before 1st July 1966. He gave the requisite notice under S. 80 of the C.P.C. and filed the suit.

(2.) In the written statement the broad facts are admitted. It is claimed that the plaintiff had no right to revoke the contract, because no communication was necessary informing the plaintiff of the acceptance of the contract. According to the defendant, the provisional acceptance by the Tahsildar by itself is sufficient to conclude a contract. It is further alleged that time was not the essence of the contract and it was not understood between the parties that the lease site would be handed over to the successful bidder in the auction before 1st July 1966. It is submitted that there was some delay in the formal acceptance of the contract by the Collector since there were representations from third parties that they were willing to pay a higher amount. This could not fructify since the third parties could not deposit the full amount as called for by the Collector. Now that the District Collector confirmed the auction in favour of the plaintiff, the plaintiff had no right to revoke a concluded contract and the so called letters of revocation are invalid and unenforceable .In that sense the suit was resisted and the claim of the plaintiff for refund of the security deposit was sought to be negatived. In any event it was said that the plaintiff's claim for damages in the sum of Rs. 2000 was utterly misconceived.

(3.) The following issues were framed : - -