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A. Mohammed Basheer v. State Of Kerala And Others
Factual and Procedural Background
The Forest Department of Kerala scheduled a public auction on 8-2-1979 for the right to collect and remove residual tree growth and firewood in Sub-Coupe No. 9, Pathanamthitta Range. The appellant’s highest bid was Rs 3,00,100. Before the bid was confirmed, a forest fire allegedly destroyed a substantial portion of the residue. The appellant thereupon requested cancellation or a reduction of the bid amount. Despite this request, the Managing Director confirmed the bid, directed execution of the agreement, and demanded the balance of Rs 3,00,100.
When the appellant failed to pay, the Department re-auctioned the lot for Rs 2,00,400, producing a shortfall of Rs 1,21,439, which it sought to recover as damages from the appellant. The appellant challenged this demand by filing a writ petition under Article 226 of the Constitution before the Kerala High Court. Relying on a Full Bench judgment in Abdul Rahiman v. Divisional Forest Officer, the High Court dismissed the petition. The present appeal is from that dismissal.
Legal Issues Presented
- Whether, in the absence of a concluded contract due to destruction of the subject-matter by fire, the appellant could be held liable for the shortfall as damages.
- Whether the Full Bench decision in Abdul Rahiman v. Divisional Forest Officer (1988 2 KLT 290) governed the present dispute, or whether it was distinguishable in light of Spl. Dy. Tahsildar, Manjeri v. Kunju Moideen (1980 KLT 850).
Arguments of the Parties
Appellant's Arguments
- The High Court erred in treating the case as covered by Abdul Rahiman; that decision is distinguishable and inapplicable to the present facts.
No detailed arguments of the respondents were recorded in the opinion.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Abdul Rahiman v. Divisional Forest Officer (1988 2 KLT 290, FB) | Permits recovery of damages by the Forest Department where breach of a concluded timber contract is admitted, invoking Section 79. | Distinguished; the Court noted that in Abdul Rahiman breach of contract was admitted, unlike the present case where no concluded contract existed. |
| Spl. Dy. Tahsildar, Manjeri v. Kunju Moideen (1980 KLT 850) | Holds that where the amount sought to be recovered is not due under any contract for timber, Section 79 cannot be invoked. | Followed; the Court found the appellant’s situation “squarely covered” by this authority and relied on it to negate liability for damages. |
Court's Reasoning and Analysis
1. The Court first examined the factual matrix: the auctioned property—residual tree growth—was largely destroyed by fire before acceptance of the bid. Because the destruction was a vis major, no concluded contract came into being.
2. Distinction from Abdul Rahiman: that judgment presupposed an admitted breach of a concluded contract and permitted recovery under Section 79. Here, the foundational element of a concluded contract is missing; therefore, the rationale of Abdul Rahiman does not apply.
3. Alignment with Kunju Moideen: the present facts resemble the scenario in which sums sought to be recovered were not “in respect of timber under any contract.” The Court considered this precedent determinative.
4. Principles of adjudication of breach and damages: The Court reiterated that questions of breach and quantification of damages must be decided by a competent authority under the governing rules. Without such a determination, recovery of damages is unsustainable.
5. Conclusion: Given the absence of a concluded contract and the lack of any competent finding of breach or quantification, the demand for Rs 1,21,439 as damages was legally untenable.
Holding and Implications
The appeal is allowed; the writ petition is allowed and the High Court’s judgment is set aside.
Direct Effect: The Forest Department’s demand for Rs 1,21,439 in damages is nullified, and no costs are awarded. The decision turns on the specific finding that no contract was concluded; it does not establish a broader precedent beyond reinforcing the need for a concluded contract and proper adjudication before damages can be imposed.
Order
1. The Forest Department in the State of Kerala decided to auction the right to collect and remove the residue of the tree growth and firewood in Sub-Coupe No. 9 in Coupe No. 3, Pathanamthitta Range by means of public auction and the auction was fixed for 8-2-1979. On that day, the appellant offered a bid for a sum of Rs 3,00,100. Before the bid was confirmed, it is alleged that a fire had broken out in the forest, with the result the residual tree growth and firewood was destroyed. The appellant herein wrote a letter to the respondents demanding reduction in the money offered by him. Despite that letter, the Managing Director confirmed the bid of the appellant and called upon him to produce the stamp paper for executing the necessary agreement and further, to deposit Rs 3,00,100 over and above the deposit already made by the appellant. Since the appellant did not deposit the money as directed by the Managing Director, the respondent reauctioned the remaining residual tree growth and firewood for a sum of Rs 2,00,400. Since there was a shortfall of Rs 1,21,439, the Managing Director wrote to the appellant to deposit the said amount by way of damages. It is under such circumstances, the appellant filed a petition under Article 226 of the Constitution before the Kerala High Court.
2. The Kerala High Court in view of its Full Bench decision in the case of Abdul Rahiman v. Divisional Forest Officer (1988) 2 KLT 290 (FB) dismissed the writ petition. It is against the said judgment of the High Court, the appellant is in appeal before us.
3. Ms Malini Poduval, learned counsel urged that the view taken by the High Court that the matter is covered by a Full Bench decision of the Kerala High Court is erroneous. She urged that the said decision is distinguishable and has no bearing in the present case.
4. We find substance in the argument. In the present case we find that there was only a bid for removal of the residual tree growth and firewood, a substantial part of which was destroyed in fire. It is under such circumstances, the appellant wrote to the Divisional Forest Officer for cancellation of his bid or reduction of the bid amount. In Abdul Rahiman case (1988) 2 KLT 290 (FB) the breach of contract stood admitted. In Abdul Rahiman (1988) 2 KLT 290 (FB) the Full Bench referred to an earlier decision reported in Special Dy. Tahsildar v. Kunju Moideen 1980 KLT 850 and distinguished the same on the ground that what was sought to be recovered therein was not an amount due on account of or in respect of timber under any contract thereof and, thus, Section 79 could not be invoked. The case of the appellant, however, appears to be squarely covered by the decision of the Kerala High Court reported in Moideen 1980 KLT 850.
5. It is trite that the question as to whether there is a breach of terms of the notice inviting tender or not should be adjudicated by an authority declared to be competent therefor. In a case where there is a dispute as to whether a damage has occurred, a finding of fact in that behalf must be arrived at by the competent authority, whereafter the amount of damages should be quantified. Such quantification of damages must also be in consonance with the terms of the relevant rules.
6. As indicated hereinbefore, the appellant herein sought reduction in money offered by him as a result of a subsequent event which was a “vis major”. No concluded contract, thus, could come into effect and under such circumstances, the question of realisation of shortfall in the form of damages does not arise.
7. In that view of the matter, the appeal deserves to be allowed. We, therefore, allow the writ petition and set aside the judgment and order under challenge.
8. The appeal is allowed. There shall be no order as to costs.
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