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Muthu Pillai Vs. the Secretary of State for India in Council Through the Collector of Madura - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Reported inAIR1923Mad582; (1923)45MLJ67
AppellantMuthu Pillai
RespondentThe Secretary of State for India in Council Through the Collector of Madura
Cases ReferredChitibobu Adema v. Garimalla Jaggarayadu
Excerpt:
.....the order of the tahsildar saying that the auction had been concluded in 1st defendant's favour cannot have the effect of altering that condition, namely, that the sale would not be confirmed until the orders of the collector were obtained. on this evidence, we are satisfied that there was no concluded contract on the 15th july and that the offer made by the 1st defendant was never accepted. in view of his former assertions that he borrowed at 12 per cent, this last statement is obviously false and it throws a good deal of doubt on the allegation that he was compelled to borrow at all......out the difficulties in which he was placed. on this evidence, we are satisfied that there was no concluded contract on the 15th july and that the offer made by the 1st defendant was never accepted. that being so, the whole of the argument addressed to us on the supposition that there was a concluded contract need not be considered now.3. the only other points which remain for consideration are (1) the rate of interest which has been allowed to the 1st defendant upon the money which he deposited and (2) the amount of rent which has been awarded to government for 1st defendant's occupation.4. as regards interest, the 1st defendant in his early petitions always asserted that he had borrowed at 12 per cent; but when the case came into court he alleged that he had borrowed at 18 per cent.....
Judgment:

1. In this case a house was put up for sale by Government and the auction was held by the Tahsildar of Madura. 1st defendant was the highest bidder and the report of the sale was forwarded to the Collector for confirmation, 1st defendant deposited 15 per cent, of the purchase money on the day of sale and the balance one month later. The sale was on the 15th of July and it was neither confirmed by the Collector nor cancelled until late in 1917. Apparently the 1st defendant on several occasions applied to the Collector for the grant of sale certificate and for the possession of the house. On one occasion he was informed that the matter had been referred to Government and orders were awaited. Finally in 1916, at his own request 1st defendant was allowed to occupy the house on condition that he would quit it whenever required. The present suit has now been brought to recover possession from the 1st defendant who refused to quit. The Government declined to confirm the sale in 1st defendant's favour, but he now contends that he is entitled to possession as the safe was completed.

2. The real question for our consideration here is what was the effect of the transaction of the 15th July 1915, namely, the auction held by the Tahsildar? It is contended for the, 1st defendant that it was a completed contract and, on that assumption, the greater part of his argument has been addressed. It is contended for Government that there was no completed contract but that the transaction before the Tahsildar amounted merely to an offer which the Collector could, or need not, accept as he pleased, The sale notification contained a stipulation that the sale would be confirmed on receipt of the Collector's order of confirmation and, after holding the auction, the Tahsildar wrote at the foot of the bidding list. 'The auction was concluded in favour of Muthu Pillai (i.e., the 1st defendant). It is argued for the 1st defendant that the meaning of 'the auction was concluded in favour of Muthu Pillai' is that there was a concluded agreement to sell and that the right was reserved in the Collector to rescind such agreement on reasonable grounds, and reliance is placed on Chitibobu Adema v. Garimalla Jaggarayadu : (1915)28MLJ617 . The facts of that case are, however, somewhat different to the present one, for when the sale was held there would appear to have been no prior stipulations as to what was going to happen, and finally the Amin who conducted the sale recorded as follow : '1st defendant bid the last bid for Rs. 150 and as no other bid for more than that it (the sale) has been confirmed in the name of the highest bidder, subject to the approval and orders of the Special Agent.' Subsequently apparently the sale was approved by the Special Agent. Here we see that there was a distinct statement that the sale had been confirmed and was merely subject to a subsequent approval by the Special Agent. Here we see that there was a distinct statement that the sale had been confirmed and was merely subject to a subsequent approval by the Special Agent and, in these circumstances, it was held that there was an acceptance by the principal of the offer and, therefore, the contract was concluded. In the present case, however, there has been no such communication to the 1st defendant arid he was distinctly informed that the sale would not be confirmed until the orders of the Collector had been received : so that the order of the Tahsildar saying that the auction had been concluded in 1st defendant's favour cannot have the effect of altering that condition, namely, that the sale would not be confirmed until the orders of the Collector were obtained. In the present case no such orders were obtained and the sale was not confirmed. No doubt there was a very great delay on the part of the Collector in making up his mind whether the sale should be confirmed or not and it would probably have been open to the 1st defendant, after waiting for a reasonable time, to refuse to be bound by the contract. That was not what he wanted to do; he wished to hold by the contract and was always pressing for the confirmation of the sale, and it is quite clear from his conduct that he was under the impression that the sale had not been concluded, for we see that he frequently put in petitions asking for the confirmation of the sale and pointing out the difficulties in which he was placed. On this evidence, we are satisfied that there was no concluded contract on the 15th July and that the offer made by the 1st defendant was never accepted. That being so, the whole of the argument addressed to us on the supposition that there was a concluded contract need not be considered now.

3. The only other points which remain for consideration are (1) the rate of interest which has been allowed to the 1st defendant upon the money which he deposited and (2) the amount of rent which has been awarded to Government for 1st defendant's occupation.

4. As regards interest, the 1st defendant in his early petitions always asserted that he had borrowed at 12 per cent; but when the case came into Court he alleged that he had borrowed at 18 per cent and he produced one document which showed that on a certain occasion he did borrow Rs. 2,000 at 18 per cent. In view of his former assertions that he borrowed at 12 per cent, this last statement is obviously false and it throws a good deal of doubt on the allegation that he was compelled to borrow at all. In any case, the lower Court has considered what would be the reasonable rate of interest and has awarded 6 per cent, and we are not prepared in appeal to interfere with this finding.

5. As regards the rate of rent, we have on the one side the opinion of the Tahsildar and the kurnam of Madura Town that the proper rent is Rs. 35 a month, whereas the 1st defendant says that it is only Rs. 26. The 1st defendant has admittedly leased out a portion of the house, but he has not adduced any evidence to corroborate his statement that the whole house would fetch only Rs. 20. The only ground on which we could interfere would be that Rs. 35 seems to be a somewhat high rate of interest on the capital, but there is no evidence as to what the usual rate is in Madura and, therefore; we must accept the lower Court's finding that Rs. 35 is the proper rent.

6. In the result, the appeal is dismissed with costs.


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