Vairappa Thevar v. The Special Tahsildar — 1987 DIGILAW 244 (MAD)

JUDGMENT V. Ramaswami, J. 1. The auction sale of arrack shop No. 2, Kumbakonam, Thanjavur district for the lease year 1973-74 was held on 21.7.1973. The appellant's bid for a monthly kist of Rs. 30,700 was accepted and the auction was knocked down in his favour. Apart from depositing Rs. 1,000 as per the conditions of the auction which enabled him to bid, the appellant did not make any further deposit. Under Clause VII of the Conditions of Auction Sale, every person whose bid is provisionally accepted shall at once deposit half a month's rent for each shop knocked down in his favour unless the initial deposit equals or exceeds two months rents. In this case the initial deposit was only Rs. 1,000 and therefore the question of its being equal or exceeding two months rent does not arise. The clause further provided that if he fails to deposit half a month's rent immediately, the initial deposit made by him with reference to condition No. 2 will be forfeited. As per notice of auction, the highest bid will be provisionally accepted by the Selling Officer subject to confirmation by the Collector. The order for the Collector confirming the bid provisionally accepted by the Selling Officer shall be final, unless it is revised by the Commissioner for special reasons. Clause XI of the Conditions of Auction Sale which is relevant for our purpose reads as follows: XI On the failure of any person to make a deposit or apply for a licence under condition VII or to comply with any requisition, or to execute any agreement under condition VII, the shop may be resold under the order of the Divisional Officer or the selling officer nominated by the Collector for the sale of the shop in the first instance, or on a report from the Divisional Officer or the Selling Officer concerned may be otherwise disposed of by the Collector. Re-sales under this condition will be at the risk of the defaulting bidder, who will forfeit all gain and, in the event of a loss, will be required to make good the deficiency between the total amount payable for the whole period under the terms of the original sale and the total amount payable by the successful bidder at the resale. In the latter case, the deposits already made by the defaulting bidder, excluding the amount of deposit, if any, forfeited to Government under condition VII (a)(i) above, will be forfeited and deducted from the loss arising from the resale, and the balance of the loss, if any, will be recoverable in the same manner as if it were an arrear of land revenue. Should however the deposits be greater than the loss by resale, only such part of the deposit as is necessary to cover loss by resale will be forfeited and the balance refunded to the defaulter. The defaulting bidder will be similarly liable if the shop is disposed of otherwise than by resale and such disposal results in loss to Government as compared with the original sale. Disposal otherwise than by resale includes closure. 2. When the appellant had not deposited half a month's rent and complied with the other provisions of the auction conditions, the shop was re-auctioned and the highest bid of a third party for a sum of Rs. 18,600 was accepted, and the re-sale was confirmed in his favour by the Collector. Invoking the provisions of Clauses XI of the conditions, a notice was issued to the appellant demanding a sum of Rs. 1,45,200 being the difference between the bid amount of the appellant and that realized in the re-auction for the one year period for which the auction was held. On the ground that there was no response to the notice issued calling upon him to pay this sum, revenue recovery proceedings were also initiated. At that stage, the appellant filed W.P. No. 3510 of 1974 K.R. Vairappo Thevar v. The Special Tahsildar, Tahsildar (Excise) Kumbakonam. That writ petition was admitted. Ultimately by an order dated 26.7.1977, this Court allowed the writ petition on the short ground that the appellant was not served with any notice prior to the recovery proceedings. Subsequent to the disposal of writ petition, a notice in Form No. 2, dated 29.12.1979 setting out the facts in detail and enclosing a statement as to how the amount of Rs. Subsequent to the disposal of writ petition, a notice in Form No. 2, dated 29.12.1979 setting out the facts in detail and enclosing a statement as to how the amount of Rs. 1,45,200 was arrived at, was issued to the appellant informing him that the amount is proposed to be recovered from him under the provisions of the Revenue Recovery Act, and if he wants to make any representation in this regard, he should send his representation in writing along with all relevant materials in support thereof to reach the Tahsildar who issued the notice within seven days from the date of receipt of the same. He was further informed that if no representation was sent, it will be assumed that he has no representation to make and the recovery will be ordered as proposed. This notice was sent by registered post on 10.1.1979. But it was returned with the endorsement that he has refused to receive the same. Thereafter, a notice sent through a messenger and it was served on the appellant in person on 2.5.1979 as seen from the endorsement of receipt of the notice in the copy of the notice and signed by the appellant. It is not clear as to why another notice was sought to be served, and again when the notice was sent, it is stated that he refused to receive the same. But what is relevant for our purpose is that the notice dated 29.12.1978 which was sent to the appellant was received by him on 2.5.1979 and that complies with the order of this Court in the earlier writ petition in W.P. No. 3510 of 1974. No representations having been received, again revenue recovery proceedings were initiated and at that stage, the appellant filed W.P. No. 5780 of 1980 praying for the issue of a writ of Prohibition prohibiting the respondents from proceeding with the collection of Rs. 1,45,200. 3. The writ petition came up for orders before the same learned single judge who allowed the writ petition earlier. The learned Judge dismissed the writ petition saying that the appellant had refused to receive the notice and even after the notice was served on him, if he has not made any representation, no complaint could be made and therefore the writ petition was dismissed. The learned Judge dismissed the writ petition saying that the appellant had refused to receive the notice and even after the notice was served on him, if he has not made any representation, no complaint could be made and therefore the writ petition was dismissed. The learned Judge also pointed out that while the earlier writ petition was pending, it appears in fact a notice was issued. The notice dated 17.12.1976 was issued and received by the appellant. But even for that notice, he had failed to make any representation. 4. We are in entire agreement with the learned Judge that this is not a case where we can interfere in exercise of the powers under Article 226 of the Constitution. As already stated, during the pendency of the earlier writ petition, in 1976 he was served with a notice. But he did not make any reply. Again a notice dated 29.12.1978 was sent by registered post and that was refused. Somehow or other, the Department was able to serve a notice on the appellant in person on 2.5.1979. But even after that, the appellant had not made any representation. In the circumstances, we are unable to agree with the learned Counsel that a further opportunity should be given to the appellant to put forward his case, if any. The ground on which the learned Counsel who canvassed the legality of the demand was that apart from making the deposit on the date of making the bid, after the bid was finally accepted the appellant had not deposited any money and therefore there was no contract, much less a concluded contract between the appellant and the department, the breach of which could be considered as a cause of action for a claim of damages. Normally we would have considered that this submission is enough to direct the Department to file a suit to establish that there was a contract and claim the damages and also pray for a decree for the amount shown as damages sustained. But the condition No. XI which we have (sic) above clearly states that even if the successful bidder fails to make a deposit under Clause VII, the shop may be re-sold at the risk of the defaulting bidder. But the condition No. XI which we have (sic) above clearly states that even if the successful bidder fails to make a deposit under Clause VII, the shop may be re-sold at the risk of the defaulting bidder. That condition is attracted and in view of the fact that he had not replied to the notices, we had to proceed on the basis that there is no dispute about the breach of the conditions. 5. The decision of the Supreme Court in State of Karnataka v. Rameshwara Rice Mills, Thiruthahalli A.I.R. 1987 S.C. 1359 relied on by the learned Counsel for the appellant would not also support him because in that the case the Supreme Court had held that a right to adjudicate upon an issue relating to a breach of conditions of the contract cannot be said to flow from or is inhered in the right conferred to assess the damages arising from a breach of conditions, and that the right of the State Government to assess damages would arise only if the breach of conditions is admitted or if no issue is made of it. In that case, in view of the fact that he had not made any representation or replied to the notices, we proceed on the basis that the breach of the condition is admitted or at least it is not made an issue. If that is so, there could be no doubt that the Government have a right to assess the damages arising from the breach and recover the amount under the provisions of the Revenue Recovery Act. 6. The other objection raised in the affidavit filed in support of the writ petition that in the re-auction a lesser amount was realized for want of proper advertisement is also a fact which cannot be taken into account now because the appellant had not replied to the notice. The reasoning which is applicable for not accepting the contention of the appellant that the Government have no power to decide whether there was a breach of condition or not will apply equally to this argument. As already stated, the decision of the Supreme Court cited supra would assist the appellant only if he had raised the question of breach of the condition in his reply and not otherwise. 7. In the result, the writ appeal fails and it is dismissed. As already stated, the decision of the Supreme Court cited supra would assist the appellant only if he had raised the question of breach of the condition in his reply and not otherwise. 7. In the result, the writ appeal fails and it is dismissed. There will be no order as to costs in this appeal.