IN THE HIGH COURT OF KERALA AT ERNAKULAM
OP No. 26673 of 1999(A)
1. BABU KURIAKOSE
... Petitioner
Vs
1. STATE OF KERALA
... Respondent
For Petitioner :SRI.THAMPAN THOMAS
For Respondent :GOVERNMENT PLEADER
The Hon'ble MR. Justice ANTONY DOMINIC
Dated :11/09/2007
O R D E R
ANTONY DOMINIC, J.
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O.P NO. 26673 OF 1999
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Dated this the 11th day of September, 2007
J U D G M E N T
The prayer in this writ petition is to quash Ext.P6 order
passed by the respondents and to direct that the deposit of
Rs.20,000/- made by the petitioner be returned to him or to
require the respondents to deliver 548.8 metric tons of
firewood on payment of the auction amount.
2. On 7/9/88, the respondents have conducted an
auction of firewood, having a quantity of 548.8 metric tons
and the petitioner was the successful bidder. According to
him, he had paid Rs.20,000/- and the department was to
confirm the auction in his favour. The confirmation of the
auction in his favour was conveyed to the petitioner only on
26/12/88. Petitioner submits that confirmation ought to
have been made within one month from the date of auction
and that by delaying the same, the respondents have
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violated the terms and conditions of the sale. It is submitted
that after confirmation of sale, when he went for taking
delivery of the firewood, it was found that the quantity
available was much less than what was tendered. According
to him, the Panchayat had also blocked the road through
which the material had to be transported. Despite
inaccessibility of the place, the petitioner represented to the
respondents for delivering the quantity sold in his favour. It
is also submitted that there was failure on the part of the
respondents, which made the petitioner approach this court
on two occasions and Ext.P4 is the judgment that was
rendered by this Court in the second original petition. In
that original petition, this Court had directed the
respondents to reconsider the claim of the petitioner and
pass fresh orders thereon. Accordingly, the petitioner was
given an opportunity of hearing and thereafter Ext.P6 order
was passed. In Ext.P6 order, it has been found that the
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Government sustained loss of Rs.1,25,049/- plus
advertisement charges and therefore the request of the
petitioner for refunding the deposit made by him of
Rs.20,000/- was turned down. It is submitted that following
Ext.P6, revenue recovery action was proposed to be initiated
for recovery of the alleged loss and that made the petitioner
file this original petition. The prayer in this writ petition is
to quash Ext.P6 order passed by the respondents and to
direct that the deposit of Rs.20,000/- made by the petitioner
be returned to him or to require the respondents to deliver
548.8 metric tons of firewood on payment of the auction
amount.
3. Counter affidavit has been filed on behalf of the
respondents contending that in terms of the conditions of
sale, if the auction purchaser committed default, re-auction
is to be held at the risk and loss of the auction purchaser.
According to the respondents, in this case, on account of the
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default committed by the petitioner, re-auction had to be
conducted and in that process the Government suffered a
loss, which has been quantified at Rs.1,25,049/-.
4. Respondents would contend that in terms of the
agreement, the loss sustained by the Government is liable
to be recovered from the petitioner and that they are
entitled to quantify the same. It is their contention that
once it is quantified and payment demanded, if there is
failure on the part of the petitioner to pay the amount,
revenue recovery action is liable to be initiated.
5. The main submission made by the counsel for the
petitioner is that the respondents cannot unilaterally
quantify the loss alleged to have been suffered by them. He
would submit that if the loss is to be quantified in a case
where breach of contract is not admitted, they have to
approach the Civil Court and only on the strength of a
decree of a Competent Civil Court can the respondents seek
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to realise the amount. Counsel, also submit that there has
been failure on the part of the respondents to deliver the
firewood sold and it was on account of the breach of
contract committed by the respondents that he could not
take delivery of the fire wood. Thus, according to him, this
is not a case where breach is admitted by the petitioner and
in which event, no unilateral quantification is permissible.
6. From the facts as narrated above, it is evident
that the petitioner is contenting for the position that it was
on account of the breach of contract committed by the
respondents that he could not take delivery of the firewood
sold in his favour. Thus this is not a case where breach of
contract has been admitted by the petitioner. The question
in such a case is whether the department is entitled to
unilaterally quantify the damages alleged to have been
sustained by them and recover the same. This question has
come up before this court on various decisions and a Full
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Bench in the case of Abdul Rahiman v. Divisional Forest
Officer (1988(2) KLT 290) considered this issue. After
analysing the precedents, the Full Bench has held that
adjudication regarding the breach of contract has to be left
to an independent person or body and cannot be done by
one of the parties to the contract. In this case, by Ext.P6,
the respondents have taken upon themselves the right to
adjudicate the breach of the contract and also the
quantification of the damages. This is impermissible. Once
breach of contract is admitted by a party to the contract, if
the contract enables the other party to quantify the
damages sustained by it on account of the breach, the other
party is entitled to quantify the same. But that principle is
inapplicable to the facts of this case, in as much as the
breach is not admitted by the petitioner. Therefore, the
respondents cannot take any coercive action against the
petitioner pursuant to Ext.P6. If they want to realise the
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damages alleged to have been sustained by them, they
have to take recourse to Civil Court. Therefore, I hold that
the respondents are not entitled to take any coercive action
for recovery against the petitioner, on the strength of
Ext.P6.
7. It is the admitted case that the petitioner had
deposited an amount of Rs.20,000/- with the respondents.
Even as on date, since the question whether the petitioner
has committed breach of contract has not been adjudicated
in the manner known to law, respondents are not justified in
withholding the amount. They are liable to refund the said
amount, which they shall do within a period of two months
from the date of receipt of a copy of this judgment. In the
peculiar facts of this case, I am not making them liable for
interest thereof. If the respondents file a suit at this
distance of time, certainly a question of limitation is likely to
be pleaded, in which case, they will be entitled to claim the
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benefit for the period during which this original petition was
pending before this Court. However, I am not finally
pronouncing on this aspect, as it will be open to the
respondents to claim the benefit, in which case, the Court
will take this also into account and pass appropriate orders
thereon.
8. In the result, the original petition will stand
disposed of with a declaration that the respondents are not
entitled to take any coercive action for the recovery of the
alleged loss on the strength of Ext.P6. They shall refund an
amount of Rs.20,000/- deposited by the petitioner within a
period of two months from the date of receipt of a copy of
this judgment.
Writ petition is disposed of as above.
ANTONY DOMINIC, JUDGE.
Rp