Skip to content


Bala Dat Vs. the Union of India (Uoi) and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial;Civil
CourtHimachal Pradesh High Court
Decided On
Case NumberCivil Writ Petn. No. 74 of 1959
Judge
Reported inAIR1960HP30
ActsConstitution of India - Article 226; ;Forest Act, 1927 - Section 82; ;Sale of Goods Act, 1930 - Section 54(2)
AppellantBala Dat
RespondentThe Union of India (Uoi) and ors.
Appellant Advocate M.L. Aukta, Adv.
Respondent Advocate Kedar Ishwar, Govt. Adv.
DispositionPetition allowed
Cases ReferredDas Kailash Nath v. Collector of Mirzapur
Excerpt:
.....and section 54 (2) of sales of goods act, 1930 - certain forest advertised by respondent to be sold at auction - appellant bid at auction accepted - appellant signed on agreement and deposited security money - later found that ¾ th trees at auction sale were fallen and rotten - appellant refused to pay rest amount - respondent sustained loss on resale - sought to recover balance amount from appellant as arrears of land revenue - appeal - appellant sought issue of writ restraining respondent from recovering balance amount - under section 54 (2) if seller gives notice of resale and resells goods then difference between original price and price obtained after resale is to be recovered as damages for loss occasioned by breach of contract - it is not described as balance of price as..........re-sold and the loss, if any, arising from such resale would be recovered from him, as arrears of land revenue. he filed an appeal and also submitted a representation to the lt. governor, himachal pradesh, against the action of the forest department, but the same were rejected and proceedings were initiated against him for the realization of the sum of rs. 7,000/-, as arrears of land revenue. according to him, the respondents did not have any power under the law to recover the said sum, as arrears of land revenue.4. the petition has been opposed by the respondents. it has been denied that a large number of trees of lot no. 4 were uprooted and rotten. the report submitted by the block officer, except in so far as it related to 27 ban trees, is stated to be not factually correct. the.....
Judgment:
ORDER

C.B. Capoor, J.C.

1. This is a petition under Article 226 of the Constitution of India, for the issue of writs in the nature of certiorari, mandamus and prohibition quashing the entire proceedings started by the respondents for the realization of Rs. 7000/- and restraining respondents Nos. 2 to 4 from proceeding further, with the realisation of the said amount. The respondents to the petition are (1) Union of India, (2) Chief Conservator of Forests, Himachal Pradesh, (3) Collector, Mahasu District, Kasumpti and (4) Conservator of Forests, Simla Circle.

2. The facts leading to the filing of the present petition are as below:

3. Certain Forests were advertised by respondent No. 4 for being sold at auction on 11-2-1958. The auction sale was held on the aforesaid date, and the petitioner in the name of Bala Datt Sharnia and Sons bid for lot No. 3, Compartment No. 1/2 Chanian forest--as to which there is no dispute in this case--and lot No. 4, Compartment No. 2/4 both situate in Junga Range Forest. The bid for the latter lot was for Rs. 7000/- and at the fall of the hammer, a sum of Rs. 350/- was deposited as earnest money. This bid was accepted by letter dated 12-2-1958, and the petitioner was directed to deposit 10 per cent of the bid money as security and to sign an agreement in the office of respondent No. 4, (vide annexure C). Thereafter he went to the spot and checked the particulars of trees detailed in the auction list, which had been issued by respondent No. 4, prior to the auction sale, and found that 3/4th of the trees were fallen and rotten, and that 27 Ban trees of IVth and Vth class did not exist.

He sent a telegram and a registered letter to the Conservator of Forests on 19-2-58, bringing to his notice, the aforesaid facts. As desired by the Block Officer Koti, he accompanied him for spot (inspection and the former submitted a report that 27 Ban trees had been cut and removed, about 60 per cent Ban trees were uprooted and rotten, and that all the Chil trees were rotten of which 3/4th were fallen. Even on the submission of the aforesaid report, respondent No. 4 insisted that the petitioner should execute an agreement. He, however, did not agree to do so, and requested respondent No. 4 to cancel the auction sale and refund the sum of Rs. 350/-.

The latter insisted that the petitioner should execute the agreement else Clause 5 of the condition on which the auction sale was held, would be enforced. He, however, undertook to replace the 27 missing Ban trees. The Divisional Forest Officer, Simla Forest Division, (vide office letter No. 67/58-59, D/- 6-8-58, copy of which is annexure O) informed the petitioner that the auction sale in respect of lot No. 4 was cancelled, the sum of Rs. 350/- deposited as earnest money was forfeited, and that the said lot would be re-sold and the loss, if any, arising from such resale would be recovered from him, as arrears of land revenue. He filed an appeal and also submitted a representation to the Lt. Governor, Himachal Pradesh, against the action of the Forest Department, but the same were rejected and proceedings were initiated against him for the realization of the sum of Rs. 7,000/-, as arrears of land revenue. According to him, the respondents did not have any power under the law to recover the said sum, as arrears of land revenue.

4. The petition has been opposed by the respondents. It has been denied that a large number of trees of lot No. 4 were uprooted and rotten. The report submitted by the Block Officer, except in so far as it related to 27 Ban trees, is stated to be not factually correct. The respondents have expressed their willingness, to replace the 27 Ban trees. It has further been pleaded that in accordance with Clause 20 of the conditions of sale, it would be presumed that the bidder had inspected the trees marked for sale, and that the petitioner, who resided at a distance of about 2 or 3 miles from lot No. 4 must have inspected the lot before bidding at the auction sale. He was thus bound to deposit the security money and to execute the agreement, as required by the conditions of sale, and on his failure to do so, the respondents had the right to forfeit the earnest money, resell the lot and realise from him the loss which may accrue to them, as a result of resale.

An effort was made to resell at auction the lot No. 4 on 26-8-58, but no one came forward to bid, and according to the respondents the loss sustained by them was to the tune of Rs. 7000/-, the difference between the price fetched at the first auction and the nil price fetched at the second auction, and that sum they were entitled to realize as arrears of land revenue.

5. The first point urged on behalf of the petitioner is that as a large number of trees, which according to the list issued by the department existed in lot No. 4 were fallen and rotten, he was not bound to execute the agreement. According to the respondents ail the trees mentioned in the list issued by them except for 27 Ban trees were intact. The parties are thus at issue on a material question of fact, and this dispute cannot be decided without further evidence. A Court exercising jurisdiction under Article 226 of the Constitution of India, does not ordinarily allow evidence to be led before it on disputed questions of fact, vide Daulat Ram v. State of Rajasthan, AIR 1960 Raj 86. I, therefore, refuse to go into the disputed question of facts.

6. The second contention advanced on behalf of the petitioner is that the respondents did hot have a right to realise the sum of Rs. 7,000/-, as arrears of land revenue. The respondents on the other hand claim to have a right to realise the aforesaid sum as arrears of land revenue under Section 82 of the Forest Act, as well as under Clauses V and XI of the conditions subject to which the auction sale was held. The relevant portions of those clauses run as below:

Clause V. 'If the successful bidder fails to sign the agreement and to deposit the security within the specified period or to fulfil any other condition of sale, his earnest money deposited will be refunded to Himachal Pradesh Administration, and in that case the lot or lots of the successful bidder will be re-sold at the risk and cost, through re-sale. The successful bidder will make good the loss, if any, to Himachal Pradesh Administration through resale, failing which the same will be recovered from him as an arrear of land revenue, under Section 82 of the Indian Forest Act, 1927. The successful bidder shall not be entitled to gain, if any, as a result of the re-sale.'

Clause XI. 'This auction sale of standing trees is made under the Indian Forest Act, 1927. Any loss accruing to Himachal Pradesh Administration under the agreement will be recovered from the purchaser as arrear of land revenue, under the Indian Forest Act.'

7. The only section of the Forest Act which authorises recovery of a sum of money as arrears of land revenue is 82 and, the conjoint effect of the aforesaid clauses is that it is only under Section 82of the Forest Act that the loss accruing to the respondents can be recovered as arrears of land revenue and that if such recovery cannot be made under that section the said clauses will not avail the respondents. The aforesaid clauses do not confer a right of recovery, apart from Section 82.

8. It has, therefore, to be seen if the sum of Rs. 7000/- can be recovered as an arrear of land revenue by virtue of Section 82 of the Forest Act. That section runs as below :

'All money payable to the Government under this Act or under any rule made under this Act, or on account of the price of any forest produce or of expenses incurred in the execution of this Act in respect of such produce, may, if not paid when due, be recovered under the law for the time being in force as if it were an arrear of land revenue......'

9. The sum of Rs. 7000/- sought to be recovered from the petitioner is not payable to the Government under the Forest Act or under any rule made thereunder, and it has to be considered, if id was payable on account of the price of any forest produce. I will first of all examine the question, as if it were one of first impression. The auction sale in favour of the petitioner has been cancelled, and the respondents cannot have a right to recover the sum of Rs. 7000/-, as the price fetched at that auction sale.

In accordance with the conditions of sale, the petitioner was not to be entitled to the excess amount, if on resale the property would have fetched a price higher than the one fetched at the first auction sale in his favour, and it could not be said, that the property sold at the 2nd auction sale, belonged to the petitioner. The sum of Rs. 7000/- sought to be recovered from the petitioner represents the loss occasioned to the respondents, as a result of non-execution of the agreement by the petitioner, and the resale which had taken place thereafter. The aforesaid liability was in the nature of damages as contemplated by Sub-section (2) of Section 54 of the Sale of Goods Act, 1930. That sub-section runs as below:

'Where the goods are of a perishable nature, or where the unpaid seller who has exercised his right of lien or stoppage in transit gives notice to the buyer of his intention to re-sell, the unpaid seller may, if the buyer does not within a reasonable time pay or tender the price, resell the goods within a reasonable time and recover from the original buyer damages for any loss occasioned by his breach of contract but the buyer shall not be entitled to any profit which may occur on the re-sale. If such notice is not given the unpaid seller shall not be entitled to recover such damages and the buyer shall be entitled to the profits, if any, on the re-sale.'

10. It is significant that in the aforesaid subsection the loss that may be occasioned by breach of contract has been specifically styled as damages.

11.According to Corpus Juris Volume 49, pages 1344 and 1345 the word 'price' inter alia means the amount at which a commodity is valued or sold in the market, the sum for which anything may be bought, or at which its value is rated, the sum in money or other equivalent set upon an article by the seller, which he demands for it. The word 'price' is not used as the equivalent of compensation except by writers on political economy and the word 'price' as used in Section 82 of the Forest Act cannot be said to cover damages. It would, therefore, be seen that the liability sought to be recovered from the petitioner as an arrear of land revenue, does not fall under Section 82.

12. Adverting to the authorities on the point, one finds that the one reported in AIR 1957 Him Pra 1, Gajjan Mal Mohan Lal v. State of Himachal Pradesh, is in favour of the respondents, while the one reported in AIR 1956 All 721, Firm Gobar-dhan Das Kailash Nath v. Collector of Mirzapur, is in favour of the petitioner.

13. The facts of AIR 1957 Him. Pra. 1 were as below : M/s. Gajjan Mal Mohan Lal and others had purchased at auction Government forest trees for a sum of Rs. 50,100 and a sum of Rs. 5,010 was deposited by them at the fall of the hammer. Subsequently they discovered some defect in the timber and made representation to the department to cancel the auction sale. The auction sale was cancelled and in accordance with the conditions of sale, published before the auction, the aforesaid forest trees were re-auctioned, and fetched a sum of Rs. 18,000. Proceedings were initiated by the Government to realize from them a sum of Rs. 27,090 representing the deficit, as arrears of land revenue.

Inter alia it was contended before the Judicial Commissioner that the sum of Rs. 27,090 was not the price of any forest produce. He held that according to Section 2 (4) of the Forest Act, the expression 'forest produce' included timber, and with that interpretation we are not concerned in the instant case. He further held that the aforesaid sum was price and in his own words, his reasoning was as below :

'The plain facts of the case are that the petitioners had purchased trees in question from the Government for a sum of Rs. 50,100. So far they have paid only Rs. 5,010 (deposited at the fall of the hammer). The further sum of Rs. 18,000 was realized by the resale of the trees in accordance with condition 8 of the conditions of sale. There remains thus a sum of Rs. 27,090 due from the petitioners on account of the price of the trees.'

14. The aforesaid reasoning overlooks that the auction sale in favour of M/s. Gajjan Mall Mohan Lal and others had been cancelled and after such cancellation, there could have been no question of recovering from them the price of the trees purchased by them. By not executing an agreement after the auction sale, M/s. Gajjan Mal Mohan Lal had committed a breach of the conditions of sale, as a result of which, the forest department had become entitled to resell the trees and to realise from them the loss occasioned, as a result of resale. The sum of Rs. 27,090, therefore, represented damages caused to the forest Department and not the price of the trees.

15. In the AIR 1956 All 721 case referred to above, it was held that under Section 54 if the seller gives notice of resale and resells the goods then difference between the original sale price and the price obtained after the resale is to be recovered as 'damages' for the loss occasioned by the breach of contract. It is not described as balance of price, because the property is not sold as the property of the buyer. If it were the property of the buyer, the buyer would have been entitled to the excess price, if any, obtained on the resale. If the claim cannot be termed as 'price' then the claim for deficit on resale of produce of Government forest money cannot be recovered as arrears of land revenue under Section 82 of the Forest Act.

16. The aforesaid view appears to me to be logical and sound, and with great respect to the learned Judicial Commissioner, I find myself unable to follow the interpretation placed by him on the word 'price' in AIR 1957 Him. Pra. 1. I, therefore, hold that the sum of Rs. 7,000/- according to the respondent's case put at its best represents damages, and is not on account of the price of any forest produce and ex hypothesi it cannot be recovered as an arrear of land revenue.

17. In this view of the matter, it is not necessary to go into the question as to whether it was incumbent upon the petitioner to have deposited the sum of Rs. 7,000 before disputing his liability to pay the same.

18. It only remains to consider the contention advanced on behalf of the respondents, that this Court should not issue a writ as an effective alternative remedy, in the shape of a regular suit is available to the petitioner. This question was also considered in AIR 1956 Allahabad 721 referred to above, and it was held that the suggested alternative remedy was not equally efficacious inasmuch as a notice under Section 80 of C. P. C. will have to be given before a suit could be filed and in the meantime the petitioner will be subject to coercive measures, and may well be arrested. The contention is, therefore, rejected.

19. I, therefore, accept the petition, and issue awrit in the nature of prohibition restraining the respondents from realising the sum of Rs. 7,000 asan arrear of land revenue. The petitioner will get hiscosts from the respondents. The pleader's fee isassessed at Rs. 50/-


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //