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Dambarudhar Behera Vs. State of Orissa and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtOrissa High Court
Decided On
Case NumberFirst Appeal No. 24 of 1971
Judge
Reported inAIR1980Ori188; 50(1980)CLT119
ActsContract Act, 1872 - Sections 16 and 19; Transfer of Property Act, 1882 - Sections 108
AppellantDambarudhar Behera
RespondentState of Orissa and ors.
Appellant AdvocateR.K. Mohapatra, Adv.
Respondent AdvocateAdv. General and ;P.V. Ramdas, Adv.
DispositionAppeal allowed
Cases ReferredJyoti Prasad Lala v. Pearilal Lala
Excerpt:
.....vitiated by non-disclosure of the above mentioned defects as to the right and possession of the forest department over the said coupe and on the ground of fraud and misrepresentation as well as for impossibility of performance. since the plaintiff failed to pay the rest three instalments, the contract was terminated. who has deposed in this case has also clearly stated that there were tenants on the land. 6. sections 16 and 19 of the indian contract act provide that if any contract is vitiated by fraud or misrepresentation, this can be avoided and if such misrepresentation is proved, then the contract becomes void section 108 of the transfer of property act also clearly provides that the lessor is under obligation to disclose the defects to the lessee, but in this case there was no..........delivery of possession of the coupe was never given to the plaintiff and in spite of that a coupe delivery certificate (ext. a) was taken from the plaintiff by the forester, beltukuri on 4-1-65. the plaintiff commenced work in the undisputed portion of the coupe and felled 238 standing trees and converted the same into 630 logs. he also transported the same to khariar road railway siding after marking verification etc. by the forest staff. he sold only 102 logs for rs. 1,095 as the d.f.o., khariar division issued export permit for 102 logs only. at the instance of p. w. 1, the plaintiff also felled 202 trees between 5-1-65 and 9-2-65, but he could not convert those trees into logs, nor could he remove the same as defendants 2 to 25 did not allow him to do so and endangered his.....
Judgment:

Das, J.

1. Plaintiff is the appellant. The suit was for declaration that the agreement dated 25-9-64 executed by the plaintiff in respect of Dadar Plantation Coupe No. II, Divisional Plot No. 79 in Khariar Forest Division is invalid in the eye of law and not binding against the plaintiff and for further declaration that the plaintiff is entitled to get Rs. 9,328 towards damages either from defendant No. 1 or from defendants Nos. 2 to 25.

2. Plaintiff's case is that the D.F.O,, Khariar Division published a notice for sale of forest produce of the aforesaid coupe for the year 1964-65. Auction was held on 25-9-64 and the bid of the plaintiff was the highest for Rs. 10,000. This bid was accepted and an agreement was executed between the D.F.O. and theplaintiff on the same day, i..e. 25-9-64. The total extent of the coupe was 45 acres which was specified in a sketch map and attached to the said agreement (Ext. 1). As per the agreement, the plaintiff deposited a sum of Rs. 1,000 towards the security deposit. On 8-11-64 the plaintiff was informed by the D.F.O. to take delivery of the coupe by 20-11-64 and to commence work after paying the first instalment of Rs. 2,500. On 1-12-64 the Forester of Beltukuri (P. W. 1) was directed by the Ranger, Nawapara to give delivery of possession of the coupe, but this was not done due to the fact that defendants 2 to 25 did not allow P. W. 1 to give delivery of possession, claiming themselves to be the raiyats or the relations of the raiyats in respect of more than 25 acres of the said coupe and owners of the standing trees. The said defendants also gave a written notice to the Forester to the effect that they would prevent the plaintiff from working the coupe unless the contract of defendant No. 1 with the plaintiff was modified to exclude the lands in respect of which they were the raiyats. The plaintiff wrote registered letters on 2-12-64, 11-12-64 and 26-12-64 to the D.F.O. informing him about the non-delivery of possession due to the obstruction created by defendants 2 to 25, although the time was the essence of the contract. He further alleged that there was vitiation of the contract due to non-disclosure of the material particulars as to the right and possession of the Forest Department over the coupe as it came to light by then that the entries in the record-of-rights stood in the names of those defendants or their relations and they were paying rent to Government and were in cultivating possession in respect of more than 25 acres out of the said coupe. The plaintiff also met the D.F.O. personally and represented to him about the difficulty created by defendants 2 to 25 in taking delivery of possession of the coupe and requested him to terminate the contract and refund the security deposit. But he was told by the D.F.O. to take delivery of possession of the undisputed portion of the coupe and it was promised by the D.F.O, that the contract would be modified or the matter would be settled with defendants 2 to 25. By letter dated 1-1-65 (Ext. 3), the plaintiff was informed by the D.F.O. to meet the Range Officer, Nawapara and to take delivery of possession of thecoupe. The Range Officer also directed the Forester, Beltukuri on 4-1-65 to deliver possession of the coupe to the plaintiff. But physical delivery of possession of the coupe was never given to the plaintiff and in spite of that a coupe delivery certificate (Ext. A) was taken from the plaintiff by the Forester, Beltukuri on 4-1-65. The plaintiff commenced work in the undisputed portion of the coupe and felled 238 standing trees and converted the same into 630 logs. He also transported the same to Khariar Road Railway Siding after marking verification etc. by the forest staff. He sold only 102 logs for Rs. 1,095 as the D.F.O., Khariar Division issued export permit for 102 logs only. At the instance of P. W. 1, the plaintiff also felled 202 trees between 5-1-65 and 9-2-65, but he could not convert those trees into logs, nor could he remove the same as defendants 2 to 25 did not allow him to do so and endangered his life as well as of his men. Accordingly, he was forced to stop the work. He intimated all these facts to the D.F.O. by a registered letter, but the D.F.O. took no action. On 23-2-65, the D.F.O. endorsed on a fresh petition of the plaintiff to the Ranger, Nawapara, who in his turn forwarded the same to the Jonk P.S. for action. The Officer-in-charge, Jonk P.S. submitted a prosecution report under Section 107, Cr. P. C. making the plaintiff, the Ranger of Nawapara and the Forester as the first party and some of the defendants as the second party and ordered the plaintiff not to work in the coupe pending disposal of the proceeding. On the basis of the said prosecution report, a case was started which terminated in favour of the second party. Plaintiff then made a representation on 1-3-65 to the Conservator of Forests, Jeypore Circle to modify the contract, extend the time of the contract, to issue export permit in respect of the logs removed to Khariar Road railway siding and to make necessary adjustment regarding consideration and payment, but the Conservator of Forests did not pay any heed to the same. At the instance of the Officer-in-charge, Jonk P.S., the R.I. submitted a detailed report about the state of affairs, saying that more than 30 acres out of 45 acres were tenanted. On 13-3-65, the D.F.O. recommended to the Conservator of Forests to terminate the contract with the plaintiff on the ground of non-payment of the instalment dues. A proceeding under Section 145, Cr. P. C. was also instituted on 14-3-65 by theOfficer-in-charge, Jonk P.S. making the plaintiff, the Range Officer and the Forester as first party and some of the defendants as second party, which ended in favour of the second party. The contract was terminated on 25-3-65. The plaintiff made a representation to the Conservator of Forests and also preferred an appeal before the Secretary, Forest Department against the aforesaid order of termination of the contract without giving an opportunity to the plaintiff of being heard, but the appeal was rejected. The said coupe was again put to auction by the D.F.O. Khariar Division, but nobody took part in the re-auction due to the defect in the title of the Forest Department over the coupe. This defect of title of the Forest Department came to the knowledge of the plaintiff subsequent to the contract and, as such, the contract is invalid in the eye of law. The contract is also vitiated by non-disclosure of the above mentioned defects as to the right and possession of the Forest Department over the said coupe and on the ground of fraud and misrepresentation as well as for impossibility of performance. The plaintiff incurred a total expenditure of Rs. 11,231 as detailed in the plaint, as a result of his action on the impugned agreement, but earned only a sum of Rs. 1,905 out of the same by sale of 102 logs and thus sustained a net loss of Rs. 9,326.

3. The first defendant, namely, the State of Orissa in the written statement pleaded inter alia that the suit is not maintainable as there is no cause of action. It is stated that the whole transaction took place with the D.F.O. and he is a necessary party to the suit. The plaintiff was the highest bidder after he inspected the coupe. The delivery of the coupe was made on 4-1-65 and the plaintiff took delivery of possession out of his own accord and duly granted a receipt for the same. As such, consideration of his applications did not arise. His prayer was rejected by the Conservator of Forests who was moved to determine the contract as the plaintiff defaulted to pay the 2nd, 3rd and 4th instalments according to the Forest Contract Rules. As the re-auction was held in the month of September, no bidder came to bid. Since the disputed coupe was declared to be a reserved forest, it was put to auction. The agreement is binding on the plaintiff since he had taken delivery of the coupe and worked out the coupe. The plots in the coupe had been declared as reservedforest since 1913, but due to the mischief of the Revenue Inspector those were recorded in the names of some tenants as per the Jamabandi of 1949-50. The source of tenancy was quite unknown. There is no order of authorities regarding settlement of the reserved forest with the tenants as there were standing trees on the plots. Consequent upon abolition of the Khariar Estate, the aforesaid area was re-located in 1957-58 and the same was taken over by the Forest Department and none of tenants including the defendants 2 to 25 raised any objection. In the year 1963, the extent of the forest area of Khariar Estate was declared as protected forest. Even after that, no objection was filed. The claim of the tenants including defendants 2 to 25 is false and fictitious. No right accrues to them by way of title even by adverse possession as they were never in possession within thirty years against Government. The plaintiff is not entitled to the declaration and the damages as prayed for.

The case of defendants 2 to 17, 19 to 22, 24 and 25 is that the plaintiff has no cause of action against them. They exercised their right over their portions in the coupe lawfully and peacefully to avoid irresponsible loss being caused by the plaintiff and defendant No. 1 by entering into the alleged contract. In fact 202 trees standing on the tenanted holding of these defendants were cut by the plaintiff or his agents for which these defendants are entitled to damages and they are not bound by any agreement between the plaintiff and defendant No. 1.

The G.A.L. for minor defendant No. 18 has adopted the written statement of the aforesaid defendants,

4. The trial court on a scrutiny of the evidence including that of P. W. 2, the R.I., found that more than 30 acres were tenanted lands in that area and, as such, there was actually misrepresentation about the extent of the coupe and the trees standing thereon by the time of the contract Ext. 1 and the contract is, therefore, vitiated under Section 19 of the Indian Contract Act. It has further been held that possession of the coupe was actually delivered to the plaintiff on 4-1-65. The plaintiff was to pay the consideration of Rs. 10,000 as per the agreement in four equal instalments, but he paid only the first instalment and did not pay the other instalments. According to the Forest Contract Rules, the ForestOfficers can stop extraction of forest produce if the contractor fails to pay any of the instalments within the grace period of thirty days beyond the date fixed and the D.F.O. also can stop the work under the contract. Since the plaintiff failed to pay the rest three instalments, the contract was terminated. It is admitted by defendant No. 1 that the appeal of the plaintiff against the order of termination was rejected without giving any opportunity to the plaintiff of being heard. The trial court has further held that the plaintiff has sustained a loss of Rs. 9,326 as claimed by him, but he is responsible for the same as he defaulted to pay the instalments. If he had paid all the instalments, then the defendants would have been held responsible for breach of the contract for not giving delivery of possession of the disputed portion of the coupe in question due to the trouble created by defendants 2 to 25. Though the D.F.O. advised the plaintiff to start work in the undisputed portion of the coupe, promising to modify the contract, yet the plaintiff should not have accepted such advice and should not have started the work in the disputed area without paying the instalments and, as such, the plaintiff is not entitled to any damage as claimed by him.

5. The undisputed fact is that though the plaintiff is the auction-purchaser in respect of 45 acres of land, it appears from the evidence of the Revenue Inspector and the Forester read with Ext. 5 series, the detailed report of the R.I., that about 45 (25?) acres and odd are tenanted lands and those are in possession of defendants 2 to 25 who are the recorded tenants and they have been paying rent. The stand taken by Government is that the plaintiff was aware of this fact and took possession of the same. From the evidence of the Forester who was directed to deliver possession, it is abundantly clear that he could not deliver possession, but obtained only a delivery certificate signed by the plaintiff. The plaintiff also contends that he signed the delivery certificate, but no delivery of possession was actually given to him. This assertion of the plaintiff is supported by the evidence of an officer of the Forest Department. From the evidence of the Forester it also transpires that he does not know English, something came from the officer of the D.F.O, and he got it signed by the plaintiff. It is also evident from the evidence of P. W. 3, the clerk in-charge, that thoughthere was alleged delivery of possession on 4-1-65, a petition had been received from defendants 2 to 25 on 2-12-64 demanding to exclude the lands in their possession, otherwise they would resist any attempt for delivery of possession. From his evidence, it also appears that for the period from 2-12-64 to 2-5-65 there is no paper in the office to show that the area was surveyed to find out if it included the tenanted lands. It was only on 29-12-67 the D.F.O. requested the S.D.O., Nawapara to see if there were persons in possession of the land. This is undoubtedly after the filing of the suit, inasmuch as the suit was filed on 20th of November, 1967. Thus, it would be seen that the Forest Department was aware that there were tenants on the land and they had also filed a petition about a month prior to the alleged delivery of possession intimating that they were tenants on the land and were in possession thereof by virtue of their own right. The concerned R.I. who has deposed in this case has also clearly stated that there were tenants on the land. In spite of these, direction was given to the Forester to deliver possession of the coupe on 4-1-65 and from the evidence of the Forester, as we have already found, only a receipt was obtained from the plaintiff to that effect and no actual delivery of possession was given. This receipt, as transpires from the evidence of P. W. 1, is only according to boundary.

6. Sections 16 and 19 of the Indian Contract Act provide that if any contract is vitiated by fraud or misrepresentation, this can be avoided and if such misrepresentation is proved, then the contract becomes void Section 108 of the Transfer of Property Act also clearly provides that the lessor is under obligation to disclose the defects to the lessee, but in this case there was no such disclosure. From the materials available on record and the admission of P. Ws. 1, 2 and 3, who are no other than officers of the Forest Department and the revenue Department, it appears that there were tenants on the land and the tenanted land was about more than 30 acres out of the 45 acres. A petition was also pending with the Forest Department about a month prior to the order for delivery of possession claiming that those lands were tenanted. In spite of all these facts, it is strange that the Forest Department claims that there was no misrepresentation and the plaintiff was responsible for all the defects. No lachescan be attributed to the plaintiff, but the laches, negligence and misrepresentation are to be attributed to Government.

7. Basing on a decision of the Privy Council and a Full Bench decision of the Calcutta High Court, it has been held in Jogesh Chandra Roy v. Emdad Meah, AIR 1932 PC 28, that where there is no dispute as to the identity of the subjects let, but the tenant denies that he has ever got possession of the subjects, it is for the landlord to prove that he has discharged his obligation to put the tenant in possession before he can enforce the tenant's obligation to pay rent. The landlord must not only show that the tenant is in possession of the subjects of the lease, but that such possession was attributable to the lease or might be so. According to the dictum of the Privy Council as stated above, onus is on the State Government to show that plaintiff was put into possession when plaintiff clearly denies delivery of possession.

8. It has been held by the trial court that plaintiff had the means of discovering the truth in ordinary diligence if he found that there was actually misrepresentation by defendant No. 1 about the extent of the coupe and the trees standing thereon by the time of entering into the contract. There is no evidence on record to that effect, in order to show that the plaintiff visited the coupe area and was satisfied about the title and possession of the Forest Department on the entire coupe area. Defendant No. 1 did not adduce any evidence at all in this case and, therefore, there is complete absence of evidence. A Division Bench of the Madras High Court in Venkataratnam v. Sivaramudu, AIR 1940 Mad 560, has held that where a person has purchased certain land and the vendor has not only failed to disclose to the vendee that he had leased the land to a third party but has represented that the vendee could take immediate possession and cultivate the land, the sale is voidable and the absence of exercise of due diligence by the vendee is no defence open to the vendor. This was a case in which there was fraudulent representation that the vendee was in a position to take possession of the property and it was contended that if the vendee would have used ordinary diligence, then she would have made a search and if she would have done so, she would have discovered that there was some defect. The Madras High Court has relied on the decisions of Alla-habad and Calcutta High Courts as well as an earlier decision of its own in this respect.

9. In case of active misrepresentation, as in the present case, and in view of the liability of defendant No. I to disclose the defect as to its title and possession under Section 108 of the Transfer of Property Act, the question of discovery by ordinary diligence does not arise. The doctrine of 'due diligence' arises when there is silence on the part of the lessor or the vendor, as the case may be. The onus to prove the exception to Section 19 of the Indian Contract Act lies on defendant No. 1 and no such plea was taken in the written statement, nor evidence has been adduced in this regard. The trial court has been labouring under misconception that defendant No. 1 had no duty to disclose the defects. But, as a matter of fact, the defects were known to defendant No. 1 and it was bound to disclose the same to the plaintiff. Simply by obtaining a receipt of delivery of possession in paper only, defendant No. 1 cannot wriggle out of the liability and put the blame on the plaintiff. The onus is on defendant No. 1 and the trial court has completely lost sight of this position of law.

9-A. In Mt. Razia Begum v. Muhammad Daud, AIR 1926 Pat 508, a Division Bench has held that in India under Section 107 (Transfer of Property Act) a lease can be created by the mere registration of the deed, without delivery of possession, and therefore a lessee or sublessee can maintain an action against the lessor for mesne profits as damages for keeping the lessee out of possession. Also it has been held by a Division Bench of the Calcutta High Court in Jyoti Prasad Lala v. Pearilal Lala, AIR 1930 Cal 384, that when the lessee could not be put into possession of the property, he can claim damages.

10. It would appear that there was clear breach of the contract by defendant No. 1 and therefore, the corresponding obligation of the plaintiff to pay the second, third and fourth instalments stood automatically vacated. As the contract is claimed to be void and it is found to be tainted with misrepresentation, the plaintiff was not bound to pay the balance instalments and had a right to withhold the same. Therefore, the finding of the trial court that the plaintiff should have paid the instalments and then repudiated the contract is not cor-rect. On the other hand, as has been observed above, the plaintiff is entitled to claim damages for not being put into possession. In this connection, it is argued that the plaintiff got into the undisputed portion of the coupe and felled some trees. This is not a case where the plaintiff was given actual delivery of possession. Somehow or other he forcibly entered into certain portion and felled some trees not only from the undisputed portion, but also from the disputed portion. He converted some of the trees out from the undisputed portion into logs and permit was given to him to export only 102 logs, but no permit was given for the balance of the logs and other cut trees remained unconverted into logs. The stand taken by defendant No. 1 is that as the contract was repudiated, no permission was given. The plaintiff has actually deducted from his claim the amount which he earned by exporting those 102 logs. But that does not absolve the liability of the Department in view of the misrepresentation and the tactics played in respect of auction, and nondelivery of possession.

11. The damages sustained by the plaintiff have been clearly proved and the trial court has also held that the damages claimed by the plaintiff have been established. Accounts have been submitted by the plaintiff which have not been challenged. The details of the claims made by the plaintiff are also not challenged either in the written statement nor any evidence has been adduced by the Department challenging the said claims. The expenses incurred and the loss sustained by the plaintiff are supported by accounts and details of the same have been given by P.W. 5, the plaintiff, which are supported by documentary evidence viz., Exts. 8, 9, 10 and 11. These have not been challenged and no cross-examination has been made challenging these documents. On the other hand, in the cross-examination of P.W. 5, the details of his expenditure have been brought out. In view of such evidence, we entirely agree with the finding of the trial court that the claims of damages made by the plaintiff are established.

The finding of the trial court that due to the laches and negligence of the plaintiff, he is not entitled to the damages claimed is not sustainable.

12. In the result, the appeal is allowed. The judgment and decree of theCourt below are set aside and the plaintiff's suit is decreed and defendant No. 1 is held liable to pay the damages to the plaintiff as prayed for with costs throughout.

Hearing fee is assessed at Rs. 150.

P.K. Mohanti, J.

I agree.


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