{"id":202132,"date":"1996-09-17T00:00:00","date_gmt":"1996-09-16T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-kalyanji-vithaldas-sons-vs-the-state-of-m-p-ors-on-17-september-1996"},"modified":"2017-05-30T22:06:38","modified_gmt":"2017-05-30T16:36:38","slug":"ms-kalyanji-vithaldas-sons-vs-the-state-of-m-p-ors-on-17-september-1996","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-kalyanji-vithaldas-sons-vs-the-state-of-m-p-ors-on-17-september-1996","title":{"rendered":"M\/S. Kalyanji Vithaldas & Sons vs The State Of M.P. & Ors on 17 September, 1996"},"content":{"rendered":"
Supreme Court of India<\/div>\n
M\/S. Kalyanji Vithaldas & Sons vs The State Of M.P. & Ors on 17 September, 1996<\/div>\n
Bench: K. Ramaswamy, G.B. Pattanaik<\/div>\n
           PETITIONER:\nM\/S. KALYANJI VITHALDAS & SONS\n\n\tVs.\n\nRESPONDENT:\nTHE STATE OF M.P. & ORS.\n\nDATE OF JUDGMENT:\t17\/09\/1996\n\nBENCH:\nK. RAMASWAMY, G.B. PATTANAIK\n\n\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n
\t\t\t O R D E R
\n     This appeal  by special  leave arises from the judgment
\nof the\tDivision Bench\tof the\tM.P. High  Court at Jabalpur
\nmade on\t January 24,   1979  in\t Miscellaneous\tPetition  N.
\n370\/71.\n<\/p>\n
     The admitted  facts are  that  the\t appellant-firm\t had
\nentered into  an agreement  with the Government for purchase
\nof Tendu leaves in Unit No. 14, Chowki in South Division for
\nthree years  ending on\tDecember 31,  1970 on  the terms and
\nconditions mentioned  in the   agreement  dated November 30,
\n1968. One of the terms was that the lease is renewable every
\nyear. The  lease commences  from February  1 of the year and
\nend on\tJanuary 31  of the  next year.\tIn  this  case,\t the
\nagreement of  the appellant commenced from March 2, 1968 and
\nit was\tto end\ton January 31, 1968. As per the terms of the
\nagreement, the\tappellant had  to opt  for renewal within 15
\ndays prior  to December 31 and the leases were to be renewed
\nwithin 15  days from  the date\tof the\tissue and  was to be
\naccepted by  the Department.  The admitted  position is that
\nthe appellant  had offered  for renewal on December 7, 1968.
\nIt is  seen from the record that the Government had accepted
\nthe offer  on January 31. 1969 and communication was sent to
\nthe appellant  on  February  7,\t 1969;\tbut  he\t refused  to
\nreceived the  same. On\tFebruary 9,  1969, the appellant had
\nsent a\ttelegram withdrawing  from the offer of the renewal.
\nSince  the     appellant   had\t refused   to\taccept\t the
\ncommunication, it  was sent  by the  Divisional\t Officer  on
\nFebruary 12,  1969 and\twas received  by  the  appellant  on
\nFebruary 17,  1969. Consequently,  a letter  was sent on May
\n20, 1970  calling upon\tthe appellant  for  payment  of\t Rs.
\n93,821.23 towards  the loss  caused by\tthe appellant due to
\nnon-execution  of   the\t renewal  deed\tand  also  for\tnon-
\ncollection of  the Tendu  leaves for the period since it was
\nnot sold to any other agency. The appellant challenged it by
\nfiling a  writ petition in the High Court. The High Court in
\nthe impugned  order dismissed  the same\t holding that before
\nthe appellant  had withdrawn  the offer,  the Government had
\nalready accepted  the offer of the appellant and, therefore,
\nhe was liable to pay the damages.\n<\/p>\n
     Shri S.V.\tDespande, learned  counsel for the appellant
\nraised\t two-fold    contentions.   Firstly,\tsince\t the
\ncommunication was  not sent  to the  appellant\tbefore\t31st
\nJanuary, the\tdeadline,  the\tappellant  was\tentitled  to
\nwithdraw from  the  offer.  He\thad  duly  withdrawn  it  on
\nFebruary 9,  1969 by  issuing\ta telegram to all concerned.
\nTherefore,  the\t  appellant  cannot   be  saddled  with\t the
\nliability for  the resultant  loss. We find  no force in the
\ncontention.\n<\/p>\n
     Clause (2) of the contract provides as under :
\n     “This agreement shall commence from
\n     2.3.1968 and  shall remain in force
\n     upto  31.12.1968\tunless\t earlier
\n     determined\t   under    the\t   terms
\n     hereinafter appearing.\n<\/p>\n
     Provided that :-\n<\/p>\n
     (1) Unless\t earlier determined  the
\n     terms of  the Agreement  there will
\n     be yearly\trenewal of  Agreement by
\n     31st January  each year by issue of
\n     an order  by Government  in writing
\n     provided, Government  are satisfied
\n     that purchaser  has  fulfilled  the
\n     following conditions each year :-\n<\/p>\n
     (a)   the\t  quantity   of\t  leaves
\n     collected\tduring\t the  year   has
\n     exceeded by  10 per  cent\tor  more
\n     over the quantity notified and also
\n     10\t per   cent  or\t more  over  the
\n     quantity  collected   in  the  unit
\n     during the preceding year.\n<\/p>\n
     (b) There\twas no serious breach of
\n     the Act  and Rules\t made thereunder
\n     and the Agreement.\n<\/p>\n
     (c) The purchaser had paid all dues
\n     including\tpenalty,     fine,  etc.
\n     promptly and in accordance with the
\n     provisions of the Agreement.\n<\/p>\n
     (2) Purchase  rate per standard bag
\n     applicable for  every renewed  year
\n     shall be  the  rate  calculated  by
\n     increasing\t  the\t purchase   rate
\n     applicable to  the proceeding  year
\n     by 5  per cent and adding to it the
\n     total increase  in rated of all the
\n     following items  during the renewed
\n     year as compared to rates fixed for
\n     the same\titems  in the  preceding
\n     year :-\n<\/p>\n
     i) Purchase rate payable to grower,\n<\/p>\n
     ii) remuneration payable to Agent,\n<\/p>\n
     iii)  handing  charges  payable  to
\n     agent.\n<\/p>\n
     (3) The  purchaser\t shall,\t execute
\n     the fresh\tAgreement within 15 days
\n     from the  date of\tthe issue of the
\n     order   granting\trenewal,   after
\n     completing all formalities required
\n     under conditions\tof Tender Notice
\n     for  executing   Agreement\t failing
\n     which the Agreement shall be liable
\n     to be  terminated by Government and
\n     all  consequences\t of  termination
\n     given in  the  Agreement  shall  be
\n     binding  and  applicable.\tLoss  to
\n     Government\t if  any  in  subsequent
\n     sale of leaves if any in subsequent
\n     sale of leaves in the unit shall be
\n     recoverable   from\t  the\tprevious
\n     purchaser.”\n<\/p>\n
     It is  seen that the appellant had a contract for three
\nyears ending  on  December  31,\t 1970.\tHe  worked  out\t the
\ncontract in  the year 1968 ending on January 31, 1969. Under
\nClause (1)  of the  proviso, unless earlier determined under
\nthe terms  of the agreement, there will be yearly renewal of
\nagreement by  31st January each year by issue of an order by
\nGovernment in  writing provided Government is satisfied that
\npurchaser  had\t fulfilled     the   conditions\t  enumerated
\nsubsequently.  It   is\ttrue,  as  contended  by  Shri\tS.V.
\nDeshpande, that\t the word ‘issue’ implies service of notice.
\nUnless the  contractor receives acceptance by the Government
\nhe will\t not be\t in a  position to  know whether  or not his
\noffer has  been accepted  by the  Government. Therefore, the
\ndate of\t the receipt  would be\tthe date  of issue. For this
\nproposition,  there   would  not  be  any  controversy.\t The
\nquestion is : whether on expiry of 31st January of the year,
\nthe previous  contractor is  absolved of  his liability\t for
\nnon-execution  of  the\trenewal\t date  ?  It  is  seen\tthat
\noriginally, the\t contract was for three years. Therefore, he
\nis entitled  for renewal  unless   it was  either determined
\nearlier and offer of renewal was rejected by the Government.
\nAdmittedly, the\t appellant had\tgiven his  offer for renewal
\nbefore the  expiry of the period and the Government also had
\naccepted the offer before 31st January, 1969. Obviously,  it
\nwould take  time  for  communication  thereof.\tIt  being  a
\ncontinuing contract which the appellant otherwise would have
\nfor three years, there is no hiatus in continuity unless and
\nstep was  taken by the Government in the interregnum to have
\nhis lease terminated in terms of the contract. In this case,
\nthe contract  has  not\tbeen  terminated.  Resultantly,\t the
\nacceptance of  the offer  communicated to  the appellant  by
\nGovernment having  been made within time, namely, on January
\n31, 1969. what remained to be done was only execution of the
\nrenewal lease deed for a further period of one year in terms
\nof the\tcontract. The appellant had withdrawn his offer only
\nafter the  acceptance was communicated to him on February 7,
\n1969. No  doubt, there\twas a defect in communication of the
\norder to  the appellant\t had withdrawn\this offer only after
\nthe acceptance\twas communicated to him on February 7, 1969.
\nNo doubt,  there was  a defect in communication of the order
\nto the appellant but as regards the address furnished by the
\nappellant and  sent to\tthe Government, there was no defect.
\nThere may  be some  typographical error\t in the\t name of the
\nappellant-company. The appellant appears to have taken undue
\nadvantage of it and sought to resile from the offer accepted
\nby the\tGovernment. Having  allowed the\t contract  to  lapse
\nresulting in  loss caused  to the State due to non-execution
\nof the contract, the resultant loss has to be recovered from
\nthe appellant.\n<\/p>\n
     Shri  S.V.\t  Despande,  learned   counsel,\t has  placed
\nreliance on  the judgment  of the same Bench in another case
\nin Shiv\t Saran Lal  vs. State  of M.P. & Ors. [AIR 1980 M.P.
\n93]. Therein,  learned\tJudges\thave  held  that  since\t the
\ncommunication of  acceptance was  not made before the expiry
\nof January 31 of the succeeding year, the contractor was not
\nliable for  the payment\t thereof. On  the principle  of\t the
\ncommunication, as  stated earlier,  there is  no quarrel but
\nthe learned  Judges have  not considered the further aspect,
\nviz., whether  in a  case  of  continuing  contract,  is  he
\nabsolved of  the liability  ? In  the view as we have stated
\nearlier, the  same Branch appears to have taken inconsistent
\nview  without\treference  to  the  judgment  under  appeal.
\nTherefore, the later view expressed by the High Court on the
\nliability is not correct in law.\n<\/p>\n
     The question then is : whether the arrears due from the
\nlessee-contractor would\t be recovered  as  arrears  of\tland
\nrevenue ?  Section 155 of the Land Revenue Code and  Section
\n3 and  4(2) of\tthe Revenue  Recovery Act  of 1890  reads as
\nunder :\n<\/p>\n
     “155. The\tfollowing monies, may be
\n     recovered, as  far as  may be under
\n     the provisions  of this  chapter in
\n     the same  manner as arrears of land
\n     revenue ;\n<\/p><\/blockquote>\n
     (a)XXXXX XXXX   XXXXX\n<\/p><\/blockquote>\n
     (b) all  monies falling  due to the
\n     State Government  under any  grant,
\n     least or  contract\t which\tprovides
\n     that they\tshall be  recoverable in
\n     the same  manner as  an arrears  of
\n     land revenue.”\n<\/p><\/blockquote>\n
     Section 3\tof the\tRevenue Recovery
\n     Act.\n<\/p><\/blockquote>\n
     “3. Recovery  of public  demands by
\n     enforcement   of process  in  other
\n     districts than  those in which they
\n     become payable  (1) where an arrear
\n     of\t  land\t revenue,   or\t a   sum
\n     recoverable as  an arrear\tof land-
\n     revenue is\t payable to  a Collector
\n     by\t a  defaulter  being  or  having
\n     property in  a district  other than
\n     that in which the arrear accrued or
\n     the sum  is payable,  the Collector
\n     may send  to the  Collector of  the
\n     other district a certificate in the
\n     form as  nearly as\t may be\t of  the
\n     Schedule, stating –\n<\/p><\/blockquote>\n
     (a) the  name of  the defaulter and
\n     such other\t  particulars  as may be
\n     necessary for  his\t identification,
\n     and\n<\/p><\/blockquote>\n
     (b) the  amount payable  by him and
\n     the account on which it is due .
\n     (2) The certificate shall be signed
\n     by the  Collector making  it (or by
\n     any  officer  whom\t such  Collector
\n     may, by  order in writing, delegate
\n     this duty)\t and save,  as otherwise
\n     provided  by  this\t act,  shall  be
\n     conclusive\t proof\tof  the\t matters
\n     therein stated.\n<\/p><\/blockquote>\n
     (3)  The  Collector  of  the  other
\n     district shall,  on  receiving  the
\n     certificate, proceed to recover the
\n     amount stated therein as if it were
\n     an arrear of land-revenue which had
\n     accrued in his own district.”
\n     Section 4(1)
\n     “4.  Remedy   available  to  person
\n     denying  liability\t to  pay  amount
\n     recovered\tunder\tlast   foregoing
\n     section (1)  when\tproceedings  are
\n     taken against  a person  under  the
\n     last  foregoing   section\tfor  the
\n     recovery of  an amount  stated in a
\n     certificate that  person may  if he
\n     denies his\t libility to  pay amount
\n     or any  part thereof  and pays  the
\n     same under\t part thereof  and  pays
\n     the  same\tunder  protest\tmade  in
\n     writing at the time of protest made
\n     in writing\t at  the  same\ttime  of
\n     protest made  in\twriting\t at  the
\n     time of  paying and   signed by him
\n     or his  agent, institute a suit for
\n     the repayment of  the amount or the
\n     part thereof so paid.”<\/p><\/blockquote>\n
     A reading\tof these  provisions would  clearly indicate
\nthat the  recovery  of\tpublic\tdemands\t by  enforcement  of
\nprocess is recoverable as arrears of land revenue, since all
\nmoneys fall  due to  the State\tGovernment, under any grant,
\nlease or contract shall be recoverable in the same manner as
\narrears\t of  land  revenue.  Therefore,\t the  Government  is
\nclearly empowered to recover the arrears of the dues as land
\nrevenue from the appellant-contractor towards loss caused to
\nthe Government\tin  not\t collecting  the  Tendu\t leaves\t the
\ncontract.\n<\/p>\n
     We\t are   informed\t that\tthe  appellant\thas  already
\nfurnished the  bank guarantee.\tThe Government is at liberty
\nto enforce  the bank guarantee and recover the same. In case
\nof any short fall of the amount already given under the bank
\nguarantee, the Government is at liberty to recover the same.\n<\/p>\n
     The appeal\t is accordingly\t dismissed  with  the  above
\ndirections but, in the circumstances, without costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India M\/S. Kalyanji Vithaldas & Sons vs The State Of M.P. & Ors on 17 September, 1996 Bench: K. Ramaswamy, G.B. Pattanaik PETITIONER: M\/S. KALYANJI VITHALDAS & SONS Vs. RESPONDENT: THE STATE OF M.P. & ORS. DATE OF JUDGMENT: 17\/09\/1996 BENCH: K. RAMASWAMY, G.B. PATTANAIK ACT: HEADNOTE: JUDGMENT: O R D E […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-202132","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nM\/S. 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