C.R. Prakash v. State of Kerala and Divisional Forest Officer, Parambikulam

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE ACTING CHIEF JUSTICE MRS.MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE V.CHITAMBARESH WEDNESDAY, THE 14TH DAY OF MARCH 2012/24TH PHALGUNA 1933 WA.No. 2444 of 2008 ( ) IN OP/6746/2000 ---------------------------------------AGAINST THE JUDGMENT IN OP.6746/2000 DATED 07-10-2008 APPELLANT(S)/PETITIONER: ---------------- C.R.PRAKASH, S/O.RAMAKRISHNAN, SARASWATHY BHAVAN, KUNNICODE P.O., KOLLAM. BY ADVS.SRI.M.M.ABDUL AZIZ (SR.) SRI.M.A.ABDUL HAKHIM SRI.JYOTHISH.J.KALLINGAL SRI.A.SHAFEEK (KAYAMKULAM) SRI.P.B.SURESH KUMAR (SR.) RESPONDENT(S)/RESPONDENTS: -------------------------- 1. STATE OF KERALA, REPRESENTED BY THE SECRETARY, DEPARTMENT OF FOREST GOVERNMENT OF KERALA, THIRUVANANTHAPURAM. 2. THE DIVISIONAL FOREST OFFICER, PARAMBIKULAM. R,R1 & 2 BY GOVERNMENT PLEADER SRI.JAMES KURIAN. THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 14-03-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **MANJULA CHELLUR, Ag.C.J. & V.CHITAMBARESH, J.** ------------------------------- ## **W.A.No.2444 of 2008** ------------------------------- ## **Dated this the 14[th] day of March, 2012** ## **J U D G M E N T** ## Manjula Chellur, Ag.C.J. The appeal is filed by the writ petitioner who was unsuccessful before the learned single Judge. The original petition came to be filed challenging Ext.P5 order passed by the Divisional Forest Officer. According to the appellant, the said order was passed unilaterally determining the amount of compensation payable to the Government on the ground of breach of contract or sale condition. The brief facts that led to the filing of the writ petition are as under. 2. There were two Forest Ranges, i.e., Parambikulam and Karimala, where auction for sale of teak poles was conducted. The auction was confirmed in favour of the appellant-writ petitioner for an amount of `.9,70,850/- and `.4,16,914/- respectively for the two areas. It is also not in dispute, an amount of `.20,000/- came to be deposited as Earnest Money Deposit for each auction or sale. However, according to the appellant, he was unable to lift the teak W.A.No.2444 of 2008 2 poles on account of some labour problems and also due to hostile attitude of the officials of the second respondent. Subsequently, a notice dated 11.12.1997 came to be issued intimating the disposal of Karimala Forest Range teak poles in public auction and so also the other area on 26.12.1997. In the said notices, it was intimated to the appellant that sale would be conducted at the risk and loss of the petitioner, for which loss the appellant would be held responsible. It is also not in dispute that subsequently by virtue of Ext.P2, the appellant was directed to pay ` 24,181/- allotted to be the loss sustained by the Government in the re-auction conducted on 26.12.1997. Accordingly, the appellant paid the said amount of ` 24,181/-. 3. Subsequently, pertaining to Parambikulam Forest Range, a notice came to be issued on 16.9.1999 wherein the reauction was indicated on 12.10.1999 at the risk and loss of the appellant. Thereafter, Ext.P5 came to be issued to the appellant demanding ` 7,34,772/- as loss sustained by the Government in the said re-auction. This Ext.P5 came to be challenged before W.A.No.2444 of 2008 3 the learned single Judge. Though the appellant raised several contentions before the learned single Judge, before us, he places reliance on the decision of the Apex Court reported in M/s.Bismi Abdullah & Sons, Merchants & Commission Agents v. The Regional Manager, F.C.I., Trivandrum and another (AIR 1987 KERALA 56) and referring to paragraph 7, it is contended that the fundamental principles of law of damages is not followed as Clause 6 of Ext.P6 requires, on the next auction date, the goods or the articles have to be sold by the Department and therefore, if any, loss is caused on account of the delay on the part of the officials, the appellant cannot be held responsible and even other wise, if at all he is liable for any damages, it has to be determined before a civil court as it involves question of fact regarding value of the articles. 4. It is not in dispute that the auction of Parambikulam Forest Range teak poles was in 1997. It is also not in dispute that till 1999, there was no re-auction of the goods. Admittedly, so far as the Karimala Forest Range, there was a sale in 1997 and the appellant even paid the demand of ` 24,181/- as W.A.No.2444 of 2008 4 loss sustained by the Government. According to the appellant, so far as Karimala Forest Range, teak poles fetched higher price than the auction price offered by the appellant and ` 24,000/was the expenses for the re-auction. According to the learned counsel for the appellant, alleged loss sustained by the respondents is only on account of the delay in re-auctioning the teak poles, and therefore, he cannot be held responsible for the same and the damages has to be assessed in a civil suit. The decision relied upon by the appellant is with regard to Section 73 of the Contract Act. While referring to assessment of damages where right of resale came to be reserved by the plaintiff, how the damages has to be assessed and what are the fundamental duties or principles of law of damages required to be followed by the parties concerned, was discussed. Ultimately, at paragraph 7 of the said decision, their Lordships proceeded to hold as under: 7. One of the fundamental principles of law of damages is that the person entitled to claim damages must do all that is within his power to mitigate damage. In case where there is no right to the difference in price on resale available to the seller as per the contract he can claim only the difference between the contract price and W.A.No.2444 of 2008 5 the market price on the date of the breach. Where the seller has got such a right the resale must nevertheless be conducted within a reasonable time from the date of breach. The damages must have relation to the market price on the date of breach whether or not the contract empowers the vendor to resell and claim the difference. In other words, the resale can only be taken as a step to enable the party to establish the market price on the date of the breach. Viewed in this manner the resale must be within a reasonable time from the date of breach so that there may not be much variance in market price between the date of resale and the date of the breach. 5. In the above case, it was a case where the plaintiff approached the civil court for recovery of ` 82,405/- as damages on account of breach of contract for sale of certain quantity of rice. According to the plaintiff, the defendant agreed to purchase the rice worth ` 3,44,786/- and thereafter defendant committed breach of the said contract and later on by re-sale, he could only fetch ` 2,74,649/- and hence sought for damages. There was a decree in favour of the plaintiff and the same came to be challenged by the defendant who suffered the decree. In that context, their Lordships held that the fundamental principles of law of damages is that the person who seeks damages must do W.A.No.2444 of 2008 6 that is within his power to mitigate the damages. So according to the appellant, by virtue of Clause 6 of Ext.P6, a duty is cast on the respondent officials to re-sale the teak poles on the next date of auction without delay. Therefore, in the absence of such fundamental principle being followed by the respondents, the question of issuance of Ext.P5 invoking Section 79 of the Kerala Forest Act would not arise. Section 79 of the Kerala Forest Act reads as under:- 79. Recovery of money due to Government : - All money, other than fines, payable to the Government under this Act or any rule made thereunder, or on account of timber of forest produce or of expenses incurred in the execution of this Act in respect of timber or forest produce , or under any contract relating to timber or forest produce including any sum recoverable thereunder for the breach thereof or in consequence of its cancellation or under the terms of a notice relating to the sale of timber or forest produce by auction or by invitation of tenders, issued by or under the authority or a Divisional Forest Officer, and all compensation awarded to the Government under this Act may, if not paid when due, be recovered under the law for the time being in force, as if it were an arrear of land revenue. 6. It is not in dispute that a reading of Section 79 W.A.No.2444 of 2008 7 clarifies the position that it is an enabling provision to conduct re-auction and realise loss caused to the Government as indicated in Section 79. The question is whether the loss sustained by the Department is attributable to the appellant herein and whether it could be the loss as envisaged under Section 79 of the Kerala Forest Act. Clause 6 of Ext.P6 refers to penalty for the non-payment of money in time and non lifting of the articles. The appellant banks upon the option given to the respondents for re-auctioning the articles on the next auction date at the same depot. According to the appellant, this is a mandate against the department officials and as a matter of fact, the affidavit filed by the respondents indicate that departmental enquiry or suitable auction was initiated against the officials of the department for not re-auctioning the articles on the next auction date. The mere fact that departmental enquiry or some enquiry was initiated against officials, it would not automatically take away the claim of the respondents that the appellant was responsible for the loss sustained by them. What is to be seen W.A.No.2444 of 2008 8 here is whether the decrease in the sale price on the next auction date was due to the delay in re-auctioning the articles. The articles in question is teak poles. There is no material for us to make a comparative statement as to what was the price of the teak poles in 1997 and what was the price in 1999 and the same is not pleaded. Even other wise, we can take judicial note of the nature of the article, Teak would not loose its value on account of any delay in re-auction. In other words, it is not a case like rice referred to in the above case or other perishable goods which would diminish in its value on account of lapse of time. Therefore, the contention of the appellant that on account of delay in re-auctioning the articles, the loss was sustained cannot be accepted. Even other wise, the citation referred to by the learned counsel for the appellant pertains to a regular suit where the suit was filed for recovery of damages and in that context, the Bench said whether the person entitled to claim damages was justified in asking for the damages and whether he has complied with his duty, i.e., doing W.A.No.2444 of 2008 9 all that was possible within his power to mitigate the damages. 7. In the absence of any material forthcoming before us indicating that the delay in re-auctioning the articles was the only reason why the goods fetched lesser price, we are unable to accept the stand of the appellant and according to us, the law laid down in the above decision does not apply to the facts of the present case. Accordingly, the writ appeal is dismissed. **MANJULA CHELLUR, Acting Chief Justice.** **V.CHITAMBARESH, Judge.** nj.15/3/12 **MANJULA CHELLUR, Ag.C.J. & V.CHITAMBARESH, J.** -------------------------------------- W.A.No.2444 of 2008 ## **JUDGMENT** Dated:- 14[th] March, 2012 --------------------------------------