M. Nalla Mohammed Rawther v. Rehabilitation Plantations Ltd.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE HARUN-UL-RASHID TUESDAY, THE 3RD DAY OF JANUARY 2012/13TH POUSHA 1933 AS.No. 72 of 2001 (C) =============== (OS.38/1994 of SUB COURT,KOTTARAKKARA) APPELLANT/DEFENDANT: =============== M.NALLA MOHAMMED RAWTHER, M.N.R.TRADERS, 123/A, PALLIVASAL STREET, KARUMBUKKADAI, COIMBATORE BY ADV.MR.KKM.SHERIF RESPONDENT/PLAINTIFF: ================ REHABILITATION PLANTATIONS LTD., PUNALUR, REP. BY IT'S MANAGING DIRECTOR. BY ADV.MR.M.C.JOHN MR.C.PRABIN BENNY THIS APPEAL SUITS HAVING COME UP FOR ADMISSION ON 03-01-2012 , THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## AS.No. 72 of 2001 (C) ## ORDER ON C.M.P.NO.485/2001 DISMISSED. 3.1.2012 SD/- HARUN-UL-RASHID, JUDGE. // TRUE COPY // P.A TO JUDGE. ## **HARUN-UL-RASHID, J. -----------------------A.S.No.72 Of 2001** **---------------------Dated this the 3[rd] day of January, 2012.** ## **J U D G M E N T** The appellant is the defendant in O.S.No.38/1994 on the file of the Sub Court, Kottarakkara. Suit was filed for realisation of amount for breach of contract. Plaintiff is a Government Company by name Rehabilitation Plantations Limited. Parties, hereinafter, are referred to as the plaintiff and defendant as arrayed in the suit. 2. On 15.2.1992 the plaintiff company published notice inviting tenders for the sale of 1115 + 440 empty unserviceable barrels. Pursuant to the notice the appellant/defendant and several others submitted tenders. The defendant quoted Rs.107.88/- per barrel which was the highest price. On 18.3.1992 the plaintiff accepted the tender of the defendant. By letter dated 21.3.1992 the defendant was called upon to deposit a sum of Rs.8,400/- as security deposit and to execute agreement within seven days of receipt of the letter in conformity with the stipulations in the tender conditions which was signed by the defendant. The defendant failed to deposit the security **::2::** ## **A.S.No.72 Of 2001** amount and did not come forward to execute the agreement. By letter dated 24.3.1992 marked as Ext.A5 in the suit, the defendant informed the plaintiff that he was not in a position to purchase the barrels @ Rs.107.88/- but, offered to purchase the barrel @ Rs.95/- per barrel. Subsequently, by letter dated 21.4.1992, the plaintiff informed the defendant that the earnest money deposit will be forfeited if he failed to deposit the security deposit of R.8,400/- and to execute the agreement within seven days of the receipt of that letter. The plaintiff also informed the defendant that the barrels will be re-sold at the risk and cost of the defendant. By proceedings dated 15.5.1992, the Managing Director of the plaintiff Company forfeited the earnest money deposit of the defendant and directed re-sale of the barrels at the risk and cost of the defendant. Pursuant thereto on 30.5.1992, the plaintiff invited quotations for re-sale of the barrels. On 9.7.1992, the plaintiff accepted the quotation submitted by M/s. Sham Traders. Pursuant thereto, M/s. Sham Traders executed agreement in favour of the plaintiff for lifting the entire quantity of barrels. Suit was filed by the plaintiff for realisation of **::3::** ## **A.S.No.72 Of 2001** Rs.58,312.50/- as ground rent for the storage of barrels for 75 days, advertisement charges of Rs.10,000/- and Rs.38,855.70/as shortfall in price between the contract price with the defendant and the re-sale price with M/s. Sham Traders on the allegation that by refusing to deposit the security amount and failure to execute the agreement the defendant had committed breach of contract and as a result, the plaintiff had suffered loss. Plaintiff prayed for a decree for Rs.1,07,168.20/- together with 12% interest per annum from the date of suit till realisation. 3. In the written statement filed by the defendant it is inter alia contended that he was not supplied with any statement containing the terms and conditions of sale, that he was asked to sign some papers, but the contends of it was not known to him nor was explained to him, that he was unaware of the conditions of the sale, that after the tender, without accepting the offer, the plaintiff had arranged for a negotiation on 12.3.1992 among the tenderers, that the plaintiff company accepted the offer unilaterally, that the plaintiff had no legal right to accept the tender without further notice to the defendant when the **::4::** ## **A.S.No.72 Of 2001** defendant had withdrawn from the offer originally made and that as the offer was withdrawn, the plaintiff was not legally bound to accept the offer unilaterally and to stipulate further conditions for the sale. According to the defendant, he was not legally bound to remit the amount and execute the agreement and in the circumstances stated in the written statement the plaintiff is not entitled to forfeit the EMD and also not entitled to re-sale the barrel at the risk and cost of the defendant. In short, the contention raised is that there was no concluded contract between the plaintiff and defendant and therefore, he is not responsible for re-sale. 4. Evidence on the side of the plaintiff consists of PWs 1 & 2 and Exts.A1 to A21. The defendant was examined as DW1. No oral evidence was adduced on his side. 5. The trial court considered the contentions in detail. The trial court after considering the evidence on record concluded that the defendant signed Ext.A2 knowing its contents. The contentions raised by the defendant in this regard was rejected by the trial court. The trial court found hat there was a **::5::** ## **A.S.No.72 Of 2001** concluded contract between the plaintiff and defendant for the sale and purchase of barrels. The trial court also considered the claim of the plaintiff for ground rent and held that the claim appears to be unconscionable or penal to some extent and held that the plaintiff is entitled to only a reasonable compensation. The court fixed Rs.10,000/- as reasonable compensation. The trial court also considered the counter claim of the defendant for the amount of Rs.8,400/- which he deposited with the plaintiff as EMD. Since on facts the court held that the defendant committed breach of contract the plaintiff is entitled to forfeit the EMD in terms of the tender conditions. The trial court decreed the suit with cost and the plaintiff is allowed to recover from the defendant and his assets a sum of Rs.58,856/- together with interest @ 12% per annum from the date of suit till the date of decree and thereafter @ 6% per annum till realisation. 6. The learned counsel for the appellant contended that the court below failed to take into consideration the fact that the appellant had withdrawn his offer before it was accepted and hence there is no concluded contract between the parties. The **::6::** ## **A.S.No.72 Of 2001** learned counsel also contended that the appellant is not legally bound to pay the security amount as he withdrawn from the offer before acceptance. 7. The learned counsel for the appellant also cited the decision reported in _**Muthu Mohammed Rawther v. Pathanamthitta Municipality**_ (1991 (2) KLT 514) and contends that for an enforceable contract there should be an offer and an unconditional acceptance, and a person who makes such an offer has the right to withdraw it before acceptance, in the absence of a condition to the contrary supported by consideration. It is submitted that a provisional acceptance cannot make a binding contract and that till the confirmation the person whose bid has been provisionally accepted is entitled to withdraw his bid. In short the contention is that if the acceptance is provisional the same cannot bring about a concluded contract. 8. I have examined the contentions of the parties in detail. A perusal of Ext.A2 tender and Ext.A3 tender conditions would show that the defendant had offered the price as per Ext.A2 tender and had signed Ext.A3 tender conditions. **::7::** ## **A.S.No.72 Of 2001** Therefore, the court below rightly held that there is absolutely no reason to hold that the defendant had not signed Ext.A2 tender and Ext.A3 tender conditions. Going by the materials on record, it is seen that the tender of the defendant was accepted by the plaintiff on 18.3.1992 and by telegram dated 20.3.1992 and letter dated 21.3.1992 the acceptance was communicated by the plaintiff to the defendant. The acceptance was absolute. Ext.A4 is dated 21.3.1992. The offer of the defendant to purchase the unserviceable barrels @ Rs.107.88/- per barrel has been accepted by the company unconditionally. Therefore, the contention that a provisional acceptance cannot make a binding contract is not applicable in the present case. Here, the offer was accepted unconditionally. Going by Ext.A4 letter of acceptance it is clear that the acceptance is not provisional, but, absolute. The contract between the plaintiff and defendant was already concluded by the acceptance letter marked as Ext.P4 dated 21.3.1992. Therefore, the finding of the trial court that there was a concluded contract between the plaintiff and defendant for purchase and sale is acceptable. After accepting offer, the **::8::** ## **A.S.No.72 Of 2001** plaintiff required the defendant to remit the EMD of Rs.8,400/and to execute an agreement in terms of Ext.A3 tender conditions and to take delivery of the barrels within the prescribed time. Admittedly, the defendant failed to deposit the EMD and to execute a formal agreement. Going by the terms and conditions in Ext.A3, the plaintiff is entitled to forfeit the EMD and has the right to order re-sale of the barrels and to recover the ground rent for keeping the barrels and advertisement charges. From Ext.P19 it can be seen that Rs.10,000/- has been spent for re-sale advertisement charges. Within two months resale was advertised and the barrels were re-sold to M/s. Sham Traders. the short fall in the price is Rs.38,855.70/-. Therefore, the trial court is justified in granting a decree to recover an amount of Rs.38,855.70/- and Rs.10,000/- for advertisement charges. 9. The claim of the plaintiff for Rs.58,312.50/- as ground rent was considered by the trial court. The trial court found that the claim is unconscionable and penal to some extent and therefore the trial court held that the plaintiff is entitled to **::9::** ## **A.S.No.72 Of 2001** reasonable compensation. The reasonable compensation is fixed at Rs.10,000/-. The trial court allowed the plaintiff to realise Rs.58,856/- together with interest @ 12%. 10. The learned counsel for the respondent submits that 12% interest awarded by the trial court is not reasonable and requested this Court to award a reasonable sum with interest. Considering the request of the learned counsel for the respondent and in the facts and circumstances of the case, this Court is of the view that the rate of interest shall be modified and fixed @ 9% per annum. In the result, the decree and judgment passed by the trial court is confirmed in all respects with the modification. The rate of interest awarded by the court below is modified and fixed at 9% per annum from the date of suit till the date of decree. **HARUN-UL-RASHID, Judge.** bkn/-