State of Kerala represented by the District Collector, Idukki vs P. M. Abraham

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE P.BHAVADASAN** **WEDNESDAY, THE 23RD NOVEMBER 2011 / 2ND AGRAHAYANA 1933** **RFA.No. 277 of 2003() --------------------OS.183/1991 of SUB COURT,THODUPUZHA ....................** ## **APPELLANTS/DEFENDANTS IN THE O.S** **-----------------------------------------------------** **1. STATE OF KERALA REPRESENTED BY THE DISTRICT COLLECTOR,** **IDUKKI,P.O. PAINAVU.** **2. CONSERVATOR OF FORESTS, HIGH RANGE CIRCLE, KOTTAYAM** **3. DIVISIONAL FOREST OFFICER, MUNNAR DIVISION , DEVIKULAM.** **BY GOVERNMENT PLEADER, SRI. T.R. RAVI.** **RESPONDENT/PLAINTIFF IN THE O.S:** **------------------------------------------------------** **P.M.ABRAHAM, S/O.MATHEW, BATLAGUNTA ROAD BEGAMPUR, DINDIKAL 624002, DINDIGAL TALUK, ANNA DISTRICT, TAMIL NADU.** **ADV. SRI.C.K.VIDYASAGAR SRI.T.I.ABDUL SALAM** **THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 23/ 11 / 2011 , THE COURT ON 23/11/2011 PASSED THE FOLLOWING:** **MM** ## **P.BHAVADASAN,J.** --------------------------------- R.F.A. No.277 OF 2003 --------------------------------Dated this the 23[rd ] day of November, 2011 ## **J U D G M E N T** Aggrieved by the judgment and decree dated 13-8-1999 of Sub Court, Thodupuzha ,the state has come up in appeal. 2.As per Ext.A1 notification the right to collect wattle bark, firewood and charcoal from various blocks of wattle plantation in Marayoor Range of Munnar Division , Devikulam was auctioned on 07-11-1990 at 3p.m.at Divisional Forest Officer, Devikulam. The plaintiff participated in the auction and was successful in respect of the block No.1 of 1976 and 1/1977 wattle plantation of Pazhathottom and Block No.2/79 at Bandher. The total bid amount was Rs.10,79,000/- .As per the terms of notification the plaintiff deposited Rs.75,000/- on 7-11-1990. It is alleged in the plaint that on 02-11-1990, the plaintiff had visited the site, the person in charge of the area pointed out the area to the R.F.A. No.277 OF 2003 2 plaintiff . Though it was difficult to identify this area, as there was no board of any sign of the block , since the plaintiff thought he would get a sketch, on that basis he took part in the auction. At the time of auction also the plaintiff pointed out the necessity to have a sketch and it is stated that the 3[rd] respondent promised to make it available. It is true that the bid for certain blocks were accepted. . 3. Subsequently plaintiff along with another contractor visited the place to plan the method to be adopted to remove the forest produce. The forest guard then pointed out a totally different area . The plaintiff found there, not even a road to the site In spite of the repeated requests and demands sketch was not made available. As a result of the non-accessibility by road it was virtually impossible to remove the materials. By Ext. A6 stated07-02-1991, the plaintiff informed the defendants that he seeks to withdraw the offer made by him in the auction on 07-11-1990 and R.F.A. No.277 OF 2003 3 demanded Rs. 75,000/- deposited by him to be returned. On 16-2-1991 as evidenced by Ext A8, the plaintiff received a letter from the third defendant, informing about the confirmation of the bid. He was called upon to remit the balance amount due from him as per the notification. According to the plaintiff ,the failure to act in accordance with the notification was due to the laches on the part of the defendants in not supplying the sketch of the site from where the materials had to be removed. There was no laches on his part and the assessment and the notice issued to him is arbitrary and violates the principles of natural justice. It is also pointed out that in agreement as envisaged under clause 4 (a) of the notification had not been executed and therefore the defendants had no enforceable contract against the plaintiff. 4. The plaintiff was served with a notice calling upon him to remit a sum of Rs. 5,90,656/- claimed to be the R.F.A. No.277 OF 2003 4 loss sustained by the State in the process of re-auctioning the removal of materials . This notice was received by the plaintiff after the suit was instituted. The plaintiff denies any liability to pay any amount on that count and also demand that Rs.75,000/- paid by him be returned. 5. The defendants resisted the suit by pointing out the various conditions in the notification and contended that the plaintiff cannot withdraw from the bid. As per the terms of the notification the plaintiff was bound to inspect the site before he participated in the bid and it is clear from various clause in the notification that once the bid is accepted, he cannot withdraw. They denied that any failure on the part of the plaintiff to remove the materials was due to the laches on the part of the defendants in not supplying the sketch as demanded by the plaintiff. They also contended that the area was shown to the plaintiff and he was satisfied and thereafter he had taken part in auction. On his failure to R.F.A. No.277 OF 2003 5 honour the contract,the State was compelled to re auction and suffered loss thereby which the plaintiff is liable to make good . Pointing out that there was no bona fide in the suit, they prayed for the dismissal of the suit. 6. On the above pleadings issues were raised. The evidence consists of the testimony of PWs1 and 2 and Exts. A1 to A10 from the side of the plaintiff. The defendants chose to adduce no evidence. 7. The trial court seems to have been impressed by the contention of the plaintiff that he was unable to perform that part of the contract mainly due to the laches on the part of the defendants who did not supply the sketch and therefore he was unaware of the site from where the materials had to be removed. It is also found by the court below that the actions taken by the defendants are arbitrary and against principles of natural justice. On the basis of these findings the suit was decreed. That brings the defendants R.F.A. No.277 OF 2003 6 before this court. 8. The question that arises for consideration is whether the finding of the court below that the defendants were not justified in making the demand as per Ext. A8 is correct? 9. The learned Government Pleader contended that the court below has omitted to note the various clauses in Ext.A1 which would clearly shows that once the bid of a person is accepted, he is precluded from withdrawing the bid. It is very clearly stated in the notification as to the conditions he has to satisfy before he takes part in the auctions and the consequences that follow after the bid is accepted. Emphasis was laid on Para 2b,4,5,14 and 19 of the notification in Ext. A1. The learned counsel also relied on the decision reported in _**Abdul Rahiman vs. Divisional Forest Officer (1988 (2) KLT 290**_ and contended that in an identical situation this court had occasion to hold that in such R.F.A. No.277 OF 2003 7 cases it is not possible for the person whose bid had been accepted to withdraw from the auction and he is liable for the consequences there after. Accordingly , it is contended that the judgment and decree of the court below are clearly and sustainable in law. 10. In reply the learned counsel for the respondents drew the attention of this court to clause 4(a) of the notification and pointed out that no such agreement as contempted therein has been executed and therefore there is no concluded contract. It is also contended that at any rate there is absolutely no data as to how the loss has been arrived at Rs.5,90,656/-. It is contended that the plaintiff is entitled to know how the sum has been computed. It is also contended that the defendants in the suit were bound to provide the sketch of the area from where the plaintiff had to remove the articles and their failure to do so, resulted in plaintiff's inability to remove the articles. Accordingly,it is R.F.A. No.277 OF 2003 8 contended no interference to call for with the judgment and decree of the court below . 11.The arguments by the learned counsel for the respondents in the appeal has to fail due to various reasons. .Ext A1 notification contains the conditions which govern the auction. It is specifically stated there in that the bidder is to satisfy himself that the articles are available and also verify the conditions in the agreement to be executed and also various clause in the agreement that is to be followed. The payments are to be made in various stages and that is also stipulated in Ext. A1 document. In para 5 it is specifically stated that though the Divisional Forest Officer reserve the right to accept or reject any offer , it prohibits the bidders from withdrawing their offer before receipt of final orders from the competent authority. Clause 14 specifically stipulates that when a person participates in the bid it is presumed that he has accepted all the conditions mentioned R.F.A. No.277 OF 2003 9 in Ext.A1 and also notified in G.O 62/76 dated 23-2-1976. Clause 19 cautions the bidders to inspect the blocks and bids as well as schedule attached in the notification and satisfy themselves with both with regard to quality and the availability of the materials for which the auction is being held. 12. In the case on hand that there is no dispute with the fact that the plaintiffs had deposited Rs 5,000/- as EMD and later on Rs.75,000/- on his bid being accepted. There is no dispute that subsequently, the plaintiff did not remove the articles from the site. Of course, he has his own reasons for the same . But what ever be the reasons, in the light of the various clauses in Ext. A1, it is not possible to accept his contention that he can withdraw because agreement under clause 4(a) has not been executed. As rightly pointed out by the Government Pleader, that is only for the performance of the contract and there are other conditions as stipulated as R.F.A. No.277 OF 2003 10 per the various clauses already referred to. It is very evident from the reading of Ext. A1 which is binding on the plaintiff that once his bid is accepted he cannot wriggle out of the contract and the contract will be deemed to have been completed. 13. An identical situation was considered in the decision reported in _**Abdul Rahiman's case**_ ,where in , it was stated as follows. Under the scheme of auction “ no highest bidder will be permitted to withdraw his offer till a final decision is taken by the department on his offer”. Therefore, the petitioner was not entitled to resile from his offer, after he was declared as the highest bidder at the close of the auction on 26-12-1979 and the first respondent rightly rejected his request.” 14. In the light of this above decision, this court ,the claim of the plaintiff that he can withdraw from the bid cannot be countenanced. 15. However there is a contention that plaintiff is not supplied with the details regarding the assessment of loss sustained by the state. The plaintiff has been served with a R.F.A. No.277 OF 2003 11 demand notice to pay a sum of Rs.5,90,656/- The complaint is that it is not possible to understand that how the figure has been arrived at and the plaintiff is entitled to know the details. 16. The plaintiff is correct in his submission and the contention appears to be justified . 17. Therefore, while this court is unable to accept the findings of the court below in granting a decree in favour of the plaintiff it is felt that an opportunity should be given to the State to establish as to how a sum of Rs. 5,90,656/- has been arrived at. In the result , this appeal is allowed. Impugned judgment and decree are set aside and the matter is remanded to the trial court only for the purpose of supplying the details regarding the quantification of Rs.5,90,656/- . which the state claims as loss sustained in the re-auction. Both parties are at liberty to adduce the evidence , if they chose to do so. R.F.A. No.277 OF 2003 12 The parties shall appear before court below on 15[th ] December,2011.The trial court may make every endeavor to dispose the suit as expeditiously as possible,at any rate within a period of six months from the date of appearance of the parties. Send a copy of this judgment to the trial court also. **P.BHAVADASAN JUDGE** **MM** # R.F.A. No.277 OF 2003 13