Kunhi Raman, J.
1. The point for decision in this case relates to the construction of Section 69 (1) of the Madras District Municipalities Act. The section is worded as follows:
Every contract made by or on behalf of a Council whereof the value or amount exceeds (one hundred rupees) shall be in writing and except in the case of contracts made under the provisions of sub-8. (3) of Section 68 shall be signed by two municipal councillors. Provided that in the case of municipalities included in Schedule IX or notified under Sub-section (1) of Section 12-C, every such contract shall be signed by the Commissioner.
The question is whether in the case of municipalities referred to in the proviso, contracts should be signed by two councillors as well as the Commissioner.
2. The suit in the present case was filed by the Municipal Council of Nellore, the petitioner in this civil revision petition. It was for recovering Rs. 250 as damages from the defendant-respondent on the ground that he was highest bidder at an auction for collecting the dues from a market but had subsequently refused to enter into the formal contract prescribed by the rules of the municipality. One of the conditions of the agreement between the parties was that when a contingency similar to that in the present case arose, it was open to the municipality to cancel the auction already held and conduct a fresh auction and that the defendant-respondent should be responsible for any consequent loss. Prior, to the auction, the defendant-respondent has deposited, as required by the rules, a sum of Rs. 50. Owing to his failure or refusal subsequent to the acceptance of his bid to enter into the formal contract prescribed by the rules, the municipality exercised its right of cancelling the original auction at which the respondent was the highest bidder and held a fresh auction. At the re-auction, the highest bid secured fell short of the defendant-respondent's original bid by Rs. 250. A suit was therefore filed against the respondent for recovering this sum of Rs. 250. The learned District Munsif who tried the suit has arrived at the conclusion that the plaintiff is not entitled to a decree, because the contract relied on by the plaintiff-petitioner did not conform to the provisions of Section 69 of the Madras District Municipalities Act read above and Rule 7 of the rules framed under the Madras District Municipalities Act of 1920. According to this rule, the authority competent to enter into a contract determined with reference to the amount of the bid that has been accepted shall enter into a, contract with the person whose bid has been accepted and settle the terms and conditions subject to which the lease is to be granted.
3. The stage contemplated by this rule had not been reached in the present case, because the defendant had refused to enter into the contract. At the trial, he was in effect taking advantage of his own wrong in not complying with this rule by pleading that there was no contract in existence as contemplated by this rule. There is a fallacy in this contention, because the contract relied on by plaintiff was that which resulted from the acceptance of the defendant's bid and not the one which should follow that event. Therefore the rule has no application to the present case which has to be determined with reference to the terms of Section 69 (1) of the Act. The respondent's learned advocate's argument is that according to Section 69 (1) it is necessary that every contract should be signed by two municipal councillors. In the present case, it is conceded that the proviso to Section 69 (1) will apply to the municipality since it is included in Schedule IX. According to the proviso, contracts with such municipalities shall be signed by the Commissioner. The respondent's learned advocate argues that they must in addition be signed by two councillors as well. The petitioner's learned advocate on the other hand argues that in the case of the municipalities described in the proviso, there is no need for two municipal councillors to sign contracts. It would be sufficient if they are signed by the Commissioner instead of two councillors referred to in Sub-section (1). This contention of the petitioner's learned advocate is well founded, because the wording of the proviso indicates that in the case of municipalities falling within its scope, it would be sufficient if the contract is signed by the Commissioner.
4. If this contention is accepted, then there is no difficulty, because the three documents, Exs. C-1, D and E-l show that all the formalities prescribed by the statute have been complied with in respect of the contract on which the suit was based. Ex. C-l is the bid list signed by the respondent and the Commissioner of the petitioner Corporation, the respondent being declared to be the highest bidder. Ex. D is the confirmation of the acceptance of the respondent's bid by the municipality which is signed by the chairman of the municipality. Ex. E-l is the communication to the respondent of the resolution passed by the municipality accepting his bid. These three documents, in my view, constitute the contract in the present case, and it is in conformity with the requirements of Section 69. The result is that the respondent became bound to follow up his bid at the auction which was accepted by the municipality by executing the prescribed lease deed in respect of which he was declared to be the successful bidder. Since he did not do this, he became liable, according to his contract with the municipality, to forfeit his deposit and also to bear the loss sustained by the municipality at the subsequent re-sale by auction. The trial Court has held that in assessing the damages, the advance of Rs. 50 paid by the respondent must be taken into consideration and deducted from the amount claimed as damages. This view is not contested by the petitioner's learned advocate. As found by the trial Court, the total loss sustained by the municipality was Rs. 250. Deducting the advance of Rs. 50 paid by the respondent the amount of damages for which he is liable is Rs. 200, for which there must be a decree in favour of the petitioner municipality with proportionate costs both here and alt the trial. The claim with regard to the balance must be dismissed, but in the circumstances without costs.