Ranipet Municipal Council by its Special Officer, Ranipet v. D. Kannammal
1998-12-23
K.P.SIVASUBRAMANIAM
body1998
DigiLaw.ai
Judgment :- 1. This Second Appeal is directed against the judgment of die learned Additional District Judge, Vellore, in A.S.Np. 21 of 1985, reversing the judgment of the learned Additional Subordinate Judge, Vellore, in O.S. No. 124 of 1979. The plaintiff, Ranipet Municipal Council, by its Special Officer is the appellant in the present Second Appeal. 2. The suit was filed by the Ranipet Municipal Council claiming a sum of Rs. 21,460/- with future interest. According to the plaintiff Ranipet Daily Market used to be leased out every year by public auction to the highest bidder for the right to collect fees from the permanent stall holders, from the temporary stall-holders, from the vegetable vendors etc., and also to collect fees from the persons who bring food articles to the market as mentioned in the auction notice. In the public auction held on 31.3.1978 the right to collect the licence fee for the abovesaid stalls, head-loads etc. had been leased out by public auction for the period from 1.4.1978 to 31.3.1979, and the defendant was the highest bidder in the auction for a sum of Rs. 50,000/- The defendant paid a sum of Rs. 12,500/-after confirmation of the lease and the defendant had agreed to pay the balance of Rs. 37,500/- in nine instalments each instalment of a sum of Rs. 4,172/-excluding the interest. The amount paid (Rs. 12,500/-) was to be adjusted for the last three months namely, January, February, and March, 1979. The auction notice was published in the District Gazette. The defendant was paying the lease amount on various date and the particulars of payment which were made between 31.3.1978 and 20.10.1978 have been given in the plaint totalling to a sum of Rs. 29,170/. According to the plaintiff, the defendant had paid only the abovesaid amount and there was a balance of Rs. 20,830/-. The amount should have been paid by the end of December, 1978 itself and the defendant had defaulted to pay the amounts inspite of repeated demands. The defendant was also liable to pay penal interest for the defaulted period. Inspite of having received notice, the defendant did not pay the amount. The power of attorney had received the notice. It is further stated that the defendant was always represented by Kandasamy who is none other than her own son.
The defendant was also liable to pay penal interest for the defaulted period. Inspite of having received notice, the defendant did not pay the amount. The power of attorney had received the notice. It is further stated that the defendant was always represented by Kandasamy who is none other than her own son. As a matter of fact in the bidders list and other communications it was only the Power of Attorney who has signed for and on behalf of the defendant. It was further contended I that the defendant had enjoyed the benefit of the collections of the rents from all the stall holders and therefore, the defendant was bound to pay the arrears of lease even as damages under Section 65 of the Contract Act. 3. In the written statement filed by the defendant, it was contended that she is an illiterate lady and that her son D. Kandaswamy was acting on her behalf. It was true that the auction for the collection of fees in the Ranipet Daily Market was held and the defendant was the highest bidder at the auction held on 31.3.1978. But the auction itself specifically states that the plaintiff and the defendant should enter into a written agreement and it is only after the agreement was executed, the plaintiff would be conferred any right and obligations. In fact it was not a lease of any right. According to the defendant, the occupants in the area have to pay at the rates specified in the auction notice and also the said rates they have said to be paying the previous years. The plaintiff was not aware of the entire area in their occupation during the previous years. In fact, the previous year, the right was leased out only to Rs. 30,000/- and in fact for the subsequent years, it was auctioned for less than for Rs. 40,000/-. It is further stated that when the defendant attempted to collect the rates mentioned in the auction notice, they refused to pay at the specified rates and tendered only the money which they were paying in the previous year. Every effort by this defendant to persuade them to pay at the official rate failed. The defendant was obliged to receive the rents under protest and he took steps with the plaintiff to see that the persons in occupation paid at the official rates.
Every effort by this defendant to persuade them to pay at the official rate failed. The defendant was obliged to receive the rents under protest and he took steps with the plaintiff to see that the persons in occupation paid at the official rates. Under the rules, the defendant has no right to evict them. If there was any default on the part of the stall owners, the defendant had to seek the aid of the plaintiff for enforcing his rights. It is further contended that through her agent the defendant immediately represented to the plaintiff about the default by the various occupants and a letter dt. 12.4.1978 was also addressed to the plaintiff in the said context. Subsequent reminders were also sent to the plaintiff and the plaintiff did not take any action and failed to take any steps to implement the terms of the auction notice. Therefore, the defendant was unable to collect from the shop keepers and consequently, she was unable to pay the plaintiff any further amount. It was further contended that there was no valid lease and what was auctioned was only the right to collect rents from various occupiers and the defendant was not liable to pay any amount inasmuch as there was no concluded agreement between the parties. The respondent had bid for the huge amount of Rs. 50,000/- only because of suppression of material facts by the plaintiff as regards the actual rates payable by the occupants. Therefore, according to the defendant, there has been a breach of terms of the contract and the defendant having been prevented from collecting the rent, the plaintiff was not entitled to claim the amount. 4. On a consideration of the said pleadings and the evidence both oral and documentary, the trial Court by its judgment dated, 15.7.1981 decreed the suit as prayed for. But however, on appeal, the lower appellate Court by its judgment date 8.4.1983 remanded the appeal for fresh disposal in accordance with the directions contained in the said judgment. After remand also the trial Court came to the conclusion that the defendant was liable to pay the amount claimed by the plaintiff, but restricted the rate of interest to six per cent per annum from the date of decree till the date of realisation. Consequently, it was held that the plaintiff would be entitled to a sum of Rs.
After remand also the trial Court came to the conclusion that the defendant was liable to pay the amount claimed by the plaintiff, but restricted the rate of interest to six per cent per annum from the date of decree till the date of realisation. Consequently, it was held that the plaintiff would be entitled to a sum of Rs. 20,830/- with proportionate costs and future interest therein at the rate of 6 per cent per annum, from the date of decree till the date of realisation. However, on appeal the learned appellate Judge reversed the findings of the trial Court and held that the plaintiff had not established its claim in terms of Section 65 of the Contract Act, with the result the appeal was allowed and the suit j was dismissed. Hence the present Second Appeal. 5. According to the learned counsel for the appellant/Municipality even though the contract may not have been executed in writing as provided under Section 69 of the Tamil Nadu District Municipalities Act, 1920, yet money due to the plaintiff was recoverable and that there was sufficient evidence to show that the defendant was in fact collecting rents from the stall holders, but would hot render accounts. But the appellate Court had wrongly cast the burden on the plaintiff. Learned, counsel would also contend that the scope of the remand order by the appellate Court earlier had been ignored by the lower appellate Court in assessing the correctness of the judgment of the trial Court. It was further contended that having regard to the specific understanding between the parties, the amounts due to the plaintiff having quantified by the fixation of specific amount, as due to the plaintiff, it was not open to the defendant to plead otherwise. 6. Per contra Mrs. Pushpa Sathyanarayanan, representing counsel for the respondent submits that the appellate Court had correctly considered the implications arising out of the requirements under Section 65 of the Contract Act and the burden of proving the recoverable amount was on the plaintiff to show that the defendant had earned any particular amount as profit. The plaintiff would be entitled to recover only that amount and the lower appellate Court, as a question of fact, has found that the plaintiff had not proved the same and as such the said findings cannot be interfered with in this Second Appeal. 7.
The plaintiff would be entitled to recover only that amount and the lower appellate Court, as a question of fact, has found that the plaintiff had not proved the same and as such the said findings cannot be interfered with in this Second Appeal. 7. It is true that in the present case that there has been no proper agreement between the parties as contemplated under Section 69 of the District Municipalities Act. But it is not as though the plaintiff would be disentitled to claim the amounts due under the agreement between the parties. Section 65 of the Contract Act provides for a case where an agreement was found to be void, any person who had received any advantage under such agreement was bound to restore the advantage or to make compensation for it to the person from whom he had received it. Under Section 70 of the Contract Act also whether a person lawfully does anything for another person and others knowing to him, not intending to do so gratuitously for the benefit and such other persons enjoyed the benefits thereof, the latter was bound to make compensation to the former. 8. A Division Bench of this Court while interpreting Section 68(2) of the District Municipalities Act held that though the contract was enforceable for want of statutory requirement, the contract was not illegal and the Municipality was not prevented from seeking relief under Sections 65 and 70 of the Contract Act for restoring to it or compensating it for the benefits or advantages gained by the other party to the Contract. A perusal of Sections 65 and. 70 of the Contract Act shows that notwithstanding the agreement being void for any reason, it was open to the party to claim compensation from the other party who had received any advantage from and out of the Contract. Having regard to the very nature of the said provisions, they are silent about requiring any particular party to prove the quantum of advantage or benefit acquired by one of the parties, under the contract. The burden of proof has to necessarily depend upon the facts and circumstances of each case and there can be no hard and fast rule o r blind policy of fixing the burden only on the plaintiff.
The burden of proof has to necessarily depend upon the facts and circumstances of each case and there can be no hard and fast rule o r blind policy of fixing the burden only on the plaintiff. Each case would involve peculiar factual circumstances throwing and shifting the burden of proof from one party to another.’ In the present case, the fact that amounts were collected by the defendant during the period under dispute is a fact which is specially within the knowledge of the defendant and the plaintiff cannot be expected to furnish any particulars of the said fact as regards the quantum of amount collected or not collected by the defendant. The learned appellate Judge had in fact rightly remanded the appeal to the trial Court under the following terms: Tamil Therefore the scope of remand was to ascertain as to how much the defendant had collected and that the trial Court ought to have fixed the compensation on the basis of the said finding. Having remanded the appeal for ascertaining and establishing the said fact, the very same learned Judge who had remanded the appeal earlier while considering the appeal after remand fell into an error in casting the burden of proof wrongly on the plaintiff holding that the plaintiff had not properly established the fact of the defendant having derived any income or profit. In this context the learned trial Judge had rightly referred to a crucial circumstance of the defendant not having filed the receipt books for the crucial period. The defendant had produced counter-foil for the receipt books only for the period from 1.11.1978 to 31.3.1979, and did not produce counter-foils or other particulars of account for the collection of fees for the period from 1.4.1978 to 31.10.1978. Learned trial Judge has taken note of the fact that the defendant had admitted that all the bill books were not filed in Court. D.W.I, defendants son, had simply stated that he had misplaced the remaining receipt books. Therefore, the learned trial Judge rightly came to the conclusion that adverse inference has to be drawn from the non-production of the receipt books by the defendant and the statement that the total collection was only Rs. 33,000/-was not acceptable. 9.
D.W.I, defendants son, had simply stated that he had misplaced the remaining receipt books. Therefore, the learned trial Judge rightly came to the conclusion that adverse inference has to be drawn from the non-production of the receipt books by the defendant and the statement that the total collection was only Rs. 33,000/-was not acceptable. 9. It has to be borne in mind that Section 103 of the Indian Evidence Act holds that the burden of proof as to any particular fact lies on the person who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person. Section 106 of the Evidence Act also holds that when any fact is especially within the knowledge of any person, the burden of proving that fact is upon him. Therefore, the principles of burden of proof are always subject to common sense as embodied under Sections 103 and 106 of the Indian Evidence Act. As the defendant had not properly discharged the said burden, I consider that there is no possibility of providing another opportunity to the defendant/respondent to adduce fresh evidence by remanding the Second Appeal. Considering the fact that such an opportunity was already given to and not availed by the defendant, and the defendant also having deliberately kept away the bill books and not producing them even after remand, can only mean that the defendant was not prepared to place the truth before the Court. It is in the said circumstances, the trial Court had rightly drawn adverse inference against the defendant. 10. As far as the quantum of compensation payable to the plaintiff is concerned, in the absence of any evidence on the side of the defendant in the context of the burden of proof to be discharged by her, there is no other alternative than to fix balance amount payable to the plaintiff in terms of the bid amount as compensation payable to the plaintiff. Section 70 of the Contract Act entitles the plaintiff to recover from the defendant, the amount earned by the defendant which could be termed as unjust enrichment. Having agreed to pay certain sum to the plaintiff towards the contract and having utilised the benefits of the contract, the defendant cannot deprive the plaintiff of the amounts due to the plaintiff.
Section 70 of the Contract Act entitles the plaintiff to recover from the defendant, the amount earned by the defendant which could be termed as unjust enrichment. Having agreed to pay certain sum to the plaintiff towards the contract and having utilised the benefits of the contract, the defendant cannot deprive the plaintiff of the amounts due to the plaintiff. The Section embodies principle of restitution and to make good unjust enrichment. 11. Therefore, in the abovementioned situation, the judgment of the appellate Court non-suiting the plaintiff cannot be sustained. 12. In the context of Section 65 of the Contract Act, reference was also made to the judgment of the Supreme Court in A.I.R. 1985 S.C. 461 (State of Rajasthan v. Associated Stone Industries (Kotah) Ltd.) In that case the grantee/Company contended that the measure of compensation under Section 65 of the Contract Act should be the actual profits derived by the Company and not royalty which the State might have levied from the Company. The Supreme Court held as follows: — “In a case like the present where the grantor is the State and the lease is for excavation of stone, the measure of the compensation payable to the grantor should be the reasonable royalty which the State would have otherwise received from the grantee.” 13. Even otherwise, in the present Second Appeal assuming that the plaintiff could have claimed only the actual profits earned by the defendant, the defendant not having produced the positive evidence available with her to quantify the profits earned by her, cannot seek to non—suit the plaintiff. No party can take advantage of his own default. 14. With the result, the Second Appeal is allowed and the findings of the lower appellate Court are set aside and the suit is decreed in terms of the decree passed by the trial Court, without any order as to costs.