State of Punjab vs Kishan Lal

Ashok Bhan, J.—State of Punjab, defendantappellant has filed this appeal against the judgment and decree dated 10.4.1978 passed by SubJudge Ist Class, Patiala by which he decreed the suit of the plaintiffrespondent for recovery of Rs. 20,000/ with costs and interest at the rate of 6% per annum thereon. Facts giving rise to the present, appeal are as under:

On 30.4.1974 fishing rights pertaining to notified waters of districts Patiala, Sangrur, Bhatinda and Bhupinder Sagar, Patiala were auctioned by the State of Punjab through its officers of the Fisheries Department. Plaintiff was the highest bidder of Rs. 55000/ for Patiala, Sangrur and Bhatinda districts and Rs. 1000/ for Bhupinder Sagar in Patiala district. Plaintiff was required to deposit Rs. 19000/ against the bid of Rs. 55000/ Accordingly, he deposited, the amount on the day of auction with the Fisheries Department. On the same day, Plaintiff was required to deposit Rs. 1000/ with the Fisheries Department for fishing rights pertaining to Bhupinder Sagar district Patiala. Public auction was for the year 197475 with effect from 1.9.1974 to 1.8.1975. The auction held on 30.8.1974 were to be approved by the Government of Punjab and ordinarily it should have been done within the reasonable time but the same was not done upto middle of November, 1974. On 11.11.1974, plaintiff sent a telegram to the Head of Department of Fisheries and other officers asking for the return of earnest money as approval to the bid had not been given by the State. Thereafter, another telegram was issued on 22.11.1974 asking for the refund of money. Ultimately on 28.11.1974, plaintiff repudiated the contract finally and informed the State Government accordingly.

The approval of the bid was received by the Fisheries Department from the Punjab Government on 6.1.1975 and the same was conveyed to the plaintiff on 8.1.1975. As per terms and conditions of auction, plaintiff was required to deposit 2% as security amount which he failed to deposit. The State Government treated this to be a breach of terms and conditions of the auction held on 30.8.1974; forfeited the refund of the amount of Rs. 20,000/ which had been deposited by the plaintiff with the State. Plaintiff filed the present suit for recovery of Rs. 20,000/ along with interest and for rescinding the order conveyed to him vide letter No. 972 dated 11.4.1975, vide which he was blacklisted for a period of five years.

The suit was resisted by the State of Punjab. In their written statement, they raised some preliminary objections regarding the maintainability of the suit; suit not being properly valued for the purposes of Court fee; legality and validity of notice under Section 80 of the Code of Civil Procedure and plaintiff having no cause of action. No timelimit. was claimed to have been fixed for obtaining the approval of the State Government in respect of the auction held on 30.8.1974. The deposit of money of Rs. 20,000/ was admitted. The fact that the period of licence for catching the fish was to be operative from 1.9.1974 to 31.8.1975 was admitted. The plea taken by the State on merits was that the highest bid offered by the plaintiff for the year 197475 being lower than the average income for the last three years the case was required to be approved by the State Government and it was submitted for approval on 31.8.1974 and the State Government conveyed the approval on 6.1.1975 and it was passed on to the plaintiffrespondent on 8.1.1975. The factum of telegram sent by the plaintiff was admitted though the correctness of the contents of the same were denied. It was further pleaded that the bidder had no right to retract from the contract for whatsoever reasons and, therefore, no refund could be claimed nor was any compensation/damages available and permissible under Rule 8(1) (2) of the Notification dated 1.8.1966. The plaintiffrespondent was charged with having failed to abide by the terms and conditions of the contract on receipt of the necessary sanction which was conveyed to him on 8.1.1975 and thus was liable to be blacklisted and for forfeiture of the security amount.

On the basis of pleadings of the parties, the trial Court framed the following issues:

(1) Whether the suit is not maintainable ? OPD

(2) Whether the suit is not properly valued and full, courtfee has not been paid ? OPD

(3) Whether the notice under Section 80 C. P. C. is not legal and valid, if so its effect ? OPD

(4) Whether the plaintiff has no cause of action ?

(5) What is the effect of nondepositing 2% of security referred to in para No. 3 of the written statement ? OPD

(6) Whether the period of lease was to be from Ist of September or from the date of the sanction of the bid in either case lasting upto 31st of August, of the following year as alleged ? OPD

(7) Whether the plaintiff withdrew his offer lawfully ? OPP

(8) Whether the plaintiff is entitled to the refund of the earnest money amounting to Rs. 2000/ together with interest at the rate of 6% ? OPP

(9) Whether the plaintiff is a defaulter ? If so its effect ? OPD,

(10) Relief.

All the issues were decided in favour of the plaintiff and against the defendant and consequently the suit was decreed.

No arguments have been addressed before me on issue Nos. 1, 2, 3 and 4. 1 propose to discuss the remaining issue Nos. 5, 6 and 8 together. As is clear from the resume of facts, plaintiffrespondent was the highest bidder and the contract was for a period of one year commencing from 1.9.1974 to 31.8.1975. He was not conveyed the approval of the State Government till 8.1.1975 and consequently, he was not handed over the fishing rights for the notified waters of districts Patiala, Sangrur, Bhatinda and Bhupinder Sagar Patiala to exercise his fishing rights. The peak season for catching the fish, according to the plaintiff, was till the end of November. The plaintiff was not to wait for indefinite period for the approval of the State Government particularly when the peak season for catching the fish was still the end of November. In my view, plaintiff respondent was justified in repudiating the contract on 28.11.1974. The State Government cannot take advantage of its own wrong. They took nearly four months in according approval to the bid which was held on 30.8.1974. The net result of this action of the State Government was that the plaintiff respondent lost his right to catch fish for a period of four months out of total period of one year and this period of four months happened to be the peak season for catching the fish. Plaintiffrespondent could not be made to suffer for the delay caused by the State in according approval to the bid held on 30.8.1974.

Moreover, it was expressly provided in the auction sale that acceptance of the bid would be subject to its confirmation by the State Government. The approval was conveyed to the plaintiffrespondent on 8.1.1975 whereas the contract was repudiated by the plaintiff respondent on 28 11.1974. There was no completed contract till the acceptance of the highest bid was confirmed by the State and the plaintiff respondent was entitled to withdraw his bid till the approval was finally granted by the State. I draw my support for this from a judgment of this Court in The Union of India v. S. Narain Singh, AIR 1953 Punjab 274, and Somasundaram Pillai v. Provincial Government of Madras, represented by Collector of South Airport AIR (34) 1947 Madras 366; the, authorities on which reliance was placed by the trial Court as well. I do not find any force in the submission of the learned counsel for the State that since there was no timelimit fixed for giving of approval by the State to the bid held on 30.8.1974, the contractor could not go back from the bid irrespective of the delay. The plaintiff respondent could not be made to suffer the loss for acts of omission and commission of the State Government in dealing with such cases in their whimsical and leisurely fashion. Plaintiff was rightly held to be entitled to the refund of Rs. 20,000/deposited as earnest money along with interest at the rate of 6% from the date of filing of the suit, i. e., 26.9.1975 till the realisation of the decretal amount. Findings of the trial Court on all the issues are affirmed. Appeal filed by the, State is dismissed with no order as to costs.