Judgment : The appellants challenge the common judgment and decrees of the Sub Court, irinjalakuda dated 9.4.1992 in O.S.Nos.144/86 and 145/86. A.S.675/94 is filed by the plaintiff in O.S.145/86 while A.S.748/1994 is filed by the plaintiff in O.S.144/86. Since both the appeals arise from the common judgment of the court below, they are considered together. 2. In both the suits the plaintiffs challenge the action of the respondents, canceling an auction that was confirmed in their favour. The appellants had bid the right to collect and remove forest growth from the S.A. Coupe No:lll of Chimmony area of Chalakkudy Forest Division. Pursuant to auction notification dated 5.10.1982 the right to collect and remove forest growth from Chimney S.A Coupe No:lll was conducted. The appellants were the successful bidders in respect of different Sub Coups. The appellant in A.S.675/94 was the successful bidder in respect of Sub Coupe l and XVll while the appellant in A.S.748/1994 was the successful bidder in respect of Sub Coupe No:Vl. In the case of Sub Coupe Nos: l and XVll, the bid amounts were Rs.7,20,780/- and Rs.6,03,000/- respectively while the bid amount in respect of Sub Coupe No: Vl was Rs.6 lakhs. An Amount of Rs.25,000/- had been deposited by way of security before the appellants had participated in the auction. The auction was conducted on 11.11.1982 and the confirmation of the same was duly communicated to the appellants. Thereafter, by letter dated 6.12.1982 they were called upon to remit the balance value to make up the 1/3rd sale price and sales tax as per chalan enclosed. They were also directed to furnish security for the balance amount. They were directed to execute separate agreements on stamp paper before 20.12.1982. It was stated in the notice that non-execution of the agreement would result in the authority concerned revoking the auction in their favour as per the provisions contained in Clause IV of the auction notice and re-auctioning of the Coupe at the risk and loss of the appellants. However, the appellants could not execute the agreement because in the meantime the received notices from the Secretary, Forest Contractors' Staff Union informing them that the 'Mesthiris' for executing the work should be engaged only from those who were doing the said work previously in that area. They were also informed that they shall recruit labourers for the work from the local area itself. They were also informed that they shall recruit labourers for the work from the local area itself. In other words they were told by the Union that they would not be able to carry on the work with their own workmen. 3. In view of the above situation, separate representations were submitted by the appellants to the authorities requesting for extension of time to execute the agreement by six months and also seeking permission to exploit the Coupe at the original rate itself or in the alternative to refund the security amount. However, the appellants allege that the officials were not willing to take into account the practical difficulties that were brought to their notice or to redress their grievances. According to the appellants the agreements could not be executed due to reasons beyond their control. In the above circumstances, the Divisional Forest Officer canceled the auction sale that was confirmed in favour of the appellants and their security amounts were forfeited. They were also informed that the Coupe would be re-auctioned at their risk and loss. Accordingly, a re-auction was conducted and since the works were confirmed at amounts considerably lower than the rates quoted by them, the difference was sought to be recovered from the appellants, invoking the provisions of the Revenue Recovery Act. The said action was challenged by the appellants in two separate writ petitions, O.P.No.3238 of 1983 and O.P.No.3237 of 1983. The amount that is sought to be recovered from the appellant in A.S.No.748 of 1994 is Rs.1,98,151.20, while the amount that is sought to be recovered from the appellant in A.S.No.675 of 1994 is Rs. 1,34,154/-. 4. It was contended before this Court in the writ petitions mentioned above, that there was no concluded contract between the appellants and the Government as required by Article 299(1) of the Constitution of India and that therefore, they had no liability to pay the amounts that were demanded. According to them, there was no provision in the auction notice empowering the authorities to decide upon the quantum of damages that the Government was entitled to recover consequent to non-performance of the promise by the contractors. Further, without determining and settling the issue by some process known to law, the authorities have no right to recover the amounts demanded, by invoking the provisions of the Kerala Revenue Recovery Act, 1968. Further, without determining and settling the issue by some process known to law, the authorities have no right to recover the amounts demanded, by invoking the provisions of the Kerala Revenue Recovery Act, 1968. Clause-36 of the auction notification provides that the auction notice would form an integral part of the agreement to be executed among the parties. It is clear from the above that the conditions in the auction notification can at best be characterized only as part of the conditions to an executory contract. Therefore, the conditions in the auction notice can be enforced by the parties only if the contract gets concluded. Since there was no concluded contract in the above case, the State was not entitled to recover any amount from the appellants. According to them, the State had also not suffered any loss consequent to the non-performance of the promise by the appellants. However, the original petitions were dismissed by this Court on 30.7.1984, without prejudice to the rights of the appellants to seek redressal of their grievances in appropriate civil proceedings to be instituted by them. 5. After the dismissal of the original petitions, the appellants caused the issue of notices under Section 80 of the Code of Civil Procedure to the respondents and thereafter the suits from which the above appeals arise were filed before the Sub Court, Irinjalakkuda. The appellants prayed for a declaration that they were not liable to pay the amounts demanded by the respondents and prayed for a consequential injunction against recovery of the amounts demanded by taking resort to the provisions of the Kerala Revenue Recovery Act, 1968. Declarations that the action of the respondents in forfeiting the amounts remitted by them as security deposits and the action of the respondents in conducting re-auction at the risk and cost of the appellants were illegal and unsustainable was also sought. 6. The suits were contested by the respondents. They contended that the suits were not maintainable and were liable to be dismissed with compensatory costs. According to them, pursuant to the Government notification published in the Government Gazette, the right to remove the tree growth in the forest area of Chimmony was auctioned. The appellants were both successful bidders at the auction. They had participated in auction, agreeing to abide by all the conditions of the sale. According to them, pursuant to the Government notification published in the Government Gazette, the right to remove the tree growth in the forest area of Chimmony was auctioned. The appellants were both successful bidders at the auction. They had participated in auction, agreeing to abide by all the conditions of the sale. They had also paid an amount of Rs.25,000/-with respect to each sub coupe in token of their acceptance of the terms and conditions in the notification. After the auction was confirmed in their favour, separate letters were issued to them directing them to remit the balance amount to make up the 1/3rd portion of the sale value and sales tax in full and directing them to furnish the required security to the tune of 10% of the sale value and to execute necessary agreements for each sub coupe on stamp paper within fifteen days, in accordance with condition Nos.5 and 6 of the notification. As per condition No.7 of the notification, in case of failure to remit the balance 1/3rd sale value and sales tax and to execute of the agreement within the grace period of two months with penalties, penal auction was liable to be initiated against the bidder by canceling the bid and conducting the sale at his risk and loss. The above facts also had been informed to the appellants by registered post. Therefore, they had no reason for not complying with the said conditions. 7. The request of the appellants for extension of time was not in accordance with the stipulations in the sale conditions. Therefore, the bid was cancelled and the security deposit was forfeited to the Government. Thereafter, resale of the auctioned right was conducted at the risk and loss of each of the appellants. Both the re-auctions were at substantially lower prices than those bid by the appellants. Therefore, the loss suffered by the Government was sought to be recovered from the appellants. The respondents have the right to recover the amount from the appellants. 8. The contention of the appellants that the conditions of the notification were not enforceable cannot be accepted. Before participating in the auction, each of the bidders had signed the sale notification in token of having accepted the sale conditions which are part and parcel of the agreement to be executed. 8. The contention of the appellants that the conditions of the notification were not enforceable cannot be accepted. Before participating in the auction, each of the bidders had signed the sale notification in token of having accepted the sale conditions which are part and parcel of the agreement to be executed. The successful bidder had also signed in the auction list in token of having accepted the price at the close of the sale. By statutory orders of the Government, any person who signs the conditions of the auction sale at which he was a bidder binds himself not to withdraw his offer. Acceptance of the offer and remittance made by the bidder is sufficient. As the bidder had backed out of his offer, he was bound to pay the loss caused to the Government, for which a concluded contract was not necessary. Clause-36 which says that the conditions of the auction shall form part of the agreement to be executed with the Government does not mean that the auction conditions were not capable of enforcement. Clause-7 of the auction notification empowers the respondents to claim the amounts that they had claimed. Such amounts were also recovered under Section79 of the kerala Forest Act, 1961. The said amounts being statutorily recoverable dues, the provisions of the Kerala Revenue Recovery Act, 1968 were capable of being pressed into service for recovering the said amounts. It was contended that a notice under Section-80 of the Code of Civil Procedure has also not been issued. Therefore, the respondents prayed for dismissal of the suits. 9. The trial court framed six issues in each suit on the above pleadings and tried the suits together treating O.S.144/1986 as the leading case. The evidence in these cases consists of the oral testimony of P.W.1 and Exts.A1 to A22 documents on the side of the plaintiff and the oral testimony of D.W.1 and Exts.B1 to B7 documents on the side of the defendants. After closing of evidence the matter was heard by the court below. 10. The court below considered the rival contentions as well as the evidence on record elaborately and came to the conclusion that the suits were maintainable for the reason that issue of notices under Section 80 and the requirements of the said provision had been satisfied before filing the suit. 10. The court below considered the rival contentions as well as the evidence on record elaborately and came to the conclusion that the suits were maintainable for the reason that issue of notices under Section 80 and the requirements of the said provision had been satisfied before filing the suit. Since the plaintiffs had not disputed the fact that loss had been caused to the State by their non-performance of the contract, it was found that the amounts claimed were due to the defendants. The court below further found that the above action of the defendants was justified under Clause 7 of the conditions of auction published by the Government. Under Section 79 of the Kerala Forest Act, since the defendants are entitled to recover the amounts claimed by them, it was held that the amounts could be recovered by invoking the provisions of the Kerala Revenue Recovery Act also. Therefore, the court below dismissed both the suits. The appellants/plaintiffs have filed the above appeals challenging the said common judgment and decrees. 11. I have heard the learned counsel Mr. K.P. Balasubramanian, who appears for the appellants in both the cases as well as the learned Government Pleader who represents the respondents. I have been taken through the pleadings in the cases, the evidence as well as the law on the point, in detail. I have anxiously considered the contentions of the rival parties. 12. According to the counsel for the appellants in both the appeals, the parties had participated in the auction in full earnestness, with the genuine intention to perform the contract without any default. However, after the auction was confirmed in the name of the appellants, they received Ext.A7 letter from the union which says that the works should be undertaken utilizing the services of only those persons who had previously been engaged for the work. The letter also informed that the union would not allow the work to be executed utilizing the services of outsiders. Thus, it became clear that the plaintiffs would not be able to get the work executed utilizing the services of their own employees. The above situation had not been anticipated by them while bidding at the auction. According to the counsel, execution of the work utilizing the services of the union employees alone, would cause huge loss to the contractors. Thus, it became clear that the plaintiffs would not be able to get the work executed utilizing the services of their own employees. The above situation had not been anticipated by them while bidding at the auction. According to the counsel, execution of the work utilizing the services of the union employees alone, would cause huge loss to the contractors. Thus, a situation was created which made it impossible for the appellants to execute the work. In other words, as a result of the stand taken by the union the contract became frustrated. The auction notification contains a provision for extension of time. Though the appellants had moved the authorities for extension of time, no orders were passed on the said petition either extending the time or rejecting the request. The file of the Government containing the proceedings of the auction has been produced and the relevant pages thereof have been marked as Exts.B2 to B5 and B5(a). The learned counsel relied on pages 311 and 318 of the file to submits that the petitions for extension of time were submitted by the appellants. Page 391 contains the proceedings dated 17.2.83 by which extension of time had been granted to another contractor. Therefore, the counsel for the appellants submit that it was in the belief that extension would be granted that they did not deposit the balance amount as stipulated by Annexure A3 letter. 13. The Government Pleader on the other hand points out that the right to remove tree growth in the area had been divided into 19 sub coups and had been auctioned to 19 persons. Out of the above, 15 contractors completed the work, that letters like Ext.A7 had been issued by the Government to each of them. Therefore, according to him, there was no frustration of contract. Secondly, the extension of time that was sought by the appellants was for a period of 6 months. No such extension could be granted because under Clause 5(i) and (ii) of Ext.A1 notification, extension for only one month could be granted. Even for the above extension, application should have been made along with deposit of interest @ 12% per annum, as stipulated therein. No orders were passed on the request for extension of time submitted by the appellants because they were not made in compliance with the stipulations contained in the above provisions. Even for the above extension, application should have been made along with deposit of interest @ 12% per annum, as stipulated therein. No orders were passed on the request for extension of time submitted by the appellants because they were not made in compliance with the stipulations contained in the above provisions. That is the reason why no orders were passed on the said request. Further, it is pointed out that the amount that is demanded is liable to be recovered under Section 79 of the Kerala Forest Act. Since the amounts due were recoverable as statutory dues, the Revenue Recovery Act is attracted. It is pointed out that the amount could be recovered under Section 68 of the Revenue Recovery Act. 14. The point that arises for consideration in the above appeals is: Whether the State is entitled to recover from them the risk and loss due to the re-auction of the sub coups conducted consequent to the default on the part of the appellants? 15. It is an admitted fact that the rights to remove tree growth from the respective sub coups in question were auctioned in favour of the appellants. According to them, they had bid the auction with the earnest desire to complete the work within the stipulated time. But, they could not undertake the work because of the unreasonable demands put forward by the labour unions. According to the union, the 'Mesthiris' for doing the work had to be engaged from persons who had earlier done the work in the said area. According to the appellants, they would have incurred huge loss, if they had undertaken the work with the union workers. Therefore, they requested for extension of time by six months. However, their request were not granted though request of similarly placed contractors were granted. Consequently they contend that their contracts became frustrated or impossible of being performed. In such a situation they are not liable for the risk and loss of the re-auction, it is contended. 15. It cannot be disputed that auction was conducted as per the terms of Ext.A1 notification. The appellants have no case that they had not read and understood the terms and conditions contained therein. They also have no case that they were not bound by the provisions of the said notification. 15. It cannot be disputed that auction was conducted as per the terms of Ext.A1 notification. The appellants have no case that they had not read and understood the terms and conditions contained therein. They also have no case that they were not bound by the provisions of the said notification. Clause-7 of Ext.A1 stipulates that failure to remit the amounts in time as stipulated in conditions 5(i) and 5(ii) thereof would entail cancellation of the sale, forfeiture of all the amounts remitted by him till that date and that the Government would be entitled to conduct re-auction or resale of the right at his risk and loss. It is further stipulated that the loss sustained to the Government on such re-auction should be paid by the defaulter within 15 days of demand by the Divisional Forest Officer failing which the amount would be recovered by invoking the provisions of the Revenue Recovery Act. It is also clarified that the defaulter would have no claim over the gain if any upon such re-auction. It is an admitted fact that the appellants had not undertaken the work of removal of the tree growth though they were the successful bidders at the auction. Consequently, the rights that were auctioned in their favour had to be sold again, by conducting a re-auction. The re-auction was confirmed at rates much lower than those at the earlier auction. Therefore, it cannot be disputed that the Government has suffered loss consequent to the re-auction. According to the counsel for the appellants, there was no breach on the part of the appellants. They were prevented from executing the contract by the recalcitrant attitude of the labour union. It is to be noted that both the appellants are experienced contractors. P.W.1 has deposed that he had been a contractor from 1970 onwards. Therefore, it cannot be expected that he was not aware of the conditions under which he had to execute the contract. He is also expected to have had knowledge of the attitude of the labourers in the area. It is pointed out by the Government Pleader that as per Ext.B1 notification 19 coups were auctioned. Out of this, 15 persons successfully completed the work and discharged their obligations under the contract, without any problems. They had executed the work under the very same conditions, in the same area. It is pointed out by the Government Pleader that as per Ext.B1 notification 19 coups were auctioned. Out of this, 15 persons successfully completed the work and discharged their obligations under the contract, without any problems. They had executed the work under the very same conditions, in the same area. Therefore, the case put forward by the appellants that they were prevented from executing the work because of the demands of the labour union cannot be accepted. 17. Though the appellants rely on Ext.A7 notice to contend that there were labour problems, not much reliance can be placed on Ext.A7 demand notice for the reason that no office bearer of the union was examined to prove the same. As pointed out by the Government Pleader, a demand notice like Ext.A7 could be obtained by seasoned contractors like the appellants, with the connivance of the office bearers of the union. It is worth noticing that there was no physical obstruction of the work by the union or a threat or strike or intimidation. There is no evidence in the case to show that any attempt was made by the appellants to sort out matters with the union and to start the work. A perusal of the evidence gives an impression that, on receipt of Ext.A7 notice, the defendants immediately abandoned the work. Ext.A7 does not disclose what were the exact demands made by the union. In the absence of any evidence regarding the above aspects, it is not possible to find that the appellants were placed in a situation where it was impossible for them to undertake and complete the work in terms of the auction notification. 18. The counsel for the appellants contend that the doctrine of frustration contemplates not merely physical impossibility to complete the work but also commercial impossibility. According to the counsel, if the work were to be undertaken utilizing the services of the union employees alone, the work would not have been a commercially viable project. He has relied on certain passages from the text book "Indian Contract and Specific Relief Act" by Pollock and Mulla, 12th Edition. According to the counsel, if the work were to be undertaken utilizing the services of the union employees alone, the work would not have been a commercially viable project. He has relied on certain passages from the text book "Indian Contract and Specific Relief Act" by Pollock and Mulla, 12th Edition. At page 1114 of the said book, the authors have made the following observation:- "Frustration signifies a certain set of circumstances arising after the formation of the contract, the occurrence of which is due to no fault of either party and which render performance of the contract by one or both parties physically and commercially impossible. The court regards these sets of circumstances as releasing the parties from any further obligations." It has been further observed at page 1117 of the very same book that the Doctrine of Frustration has been developed by law as an expedient to escape from injustice where such injustice would result from enforcement of a contract in its literal terms after a significant change in the circumstances. "It is really a device by which the rules as to absolute contracts are reconciled with a special exception which justice demands." The reason for the development of the doctrine has been referred to at page 1118 of the same book in the following words:- "The necessity of evolving one or the other theory was due to the common law rule that courts have no power to absolve a party to the contract from his obligation. On the other hand, they were anxious to preserve intact the sanctity of contract while on the other, the courts could not shut their eyes to the harshness of the situation in cases where the performance became impossible by causes which could not have been foreseen and which were beyond the control of parties." 19. The above propositions are beyond the pale of controversy. But, it has to be established that the performance of the contract had become impossible, physically or commercially, as the case may be. However, in the present case as already noticed, there is no evidence regarding the circumstances which are alleged to have made the contract impossible of being performed. The burden of proving that the contract had become frustrated was squarely on the appellants. However, in the present case as already noticed, there is no evidence regarding the circumstances which are alleged to have made the contract impossible of being performed. The burden of proving that the contract had become frustrated was squarely on the appellants. The appellants have not established by clear and cogent evidence that the situation created by the stand adopted by the union was such that the contract was impossible of being performed. In the absence of the such evidence, there is nothing on record to justify a finding that the contract was frustrated in the present case. Therefore, the contention of the appellants that the contract was frustrated and that for the said reason the non-performance of their obligations under the contract was justified, is unsustainable. In view of the above, it is found that there is no evidence in the present case to show that the contract was frustrated, as contended. 20. It is further contended by the counsel for the appellants that they had submitted applications for extension of time under Clause 5(i) of Ext.A1 notification. The fact that such applications were submitted is evident from pages 311 & 318 of the file produced by the respondents. It is pointed out that though no orders were passed on the applications for extension submitted by the appellants, similar applications submitted by other contractors were granted, as seen from the proceedings in pages 291 & 321 of the said file. It is true that no orders have been passed on the request for extension of time submitted by the appellants. However, the appellants could not have presumed that an extension would be granted to them in the normal course. Extension of time cannot also be claimed as a matter of right. The learned Government Pleader has drawn my attention to Clause (v) of Ext.A1 notification which provides for the grant of an extension for a period of 30 days with 12% penal interest by the Divisional Forest Officer and a further extension for another 30 days by the Conservator of Forests with 24% penal interest. Clause (v)(ii) stipulates payment of the remaining 2/3rd of the bid amount in two instalments. The first within one month of the date of execution of the agreement and the other within two months of the agreement. Clause (v)(ii) stipulates payment of the remaining 2/3rd of the bid amount in two instalments. The first within one month of the date of execution of the agreement and the other within two months of the agreement. The above clause also provides for an extension of the period by 30 days at the hands of the Divisional Forest Officer on payment of 12% penal interest and a further period of 30 days by the Conservator of Forest at 15% penal interest. According to the Government Pleader, the extension of time that was sought for by the appellants was not in compliance with any of the provisions referred to above, since the extension of time sought was for a period of six months. In the facts and circumstances of the present case, there is no evidence to show that the appellants had done anything to carry out the works under the contract after the auction was confirmed in their names. In this case, there is nothing to show that any prejudice has been caused to the appellants by the action of the respondents in not passing any orders on the petitions for extension of time submitted by them. The respondents cannot be found fault with for not having passed any orders on the said petition since the prayers therein could not be granted under the terms of Ext.A1 notification. 21. Pursuant to the default on the part of the appellants to perform their obligations under the contract, the work had to be re-auctioned and that too at rates substantially lower than those quoted by the appellants. Consequently the Government has suffered loss. The State has sought to recover the said loss from the appellants. The appellant in O.S.675/1994 had bid the work for an amount of Rs.7,20,700/-. He had taken the right in respect of another sub coup for an amount of Rs.6,03,000/-. The above sub coups were re-auctioned at an amount of Rs.6,75,100/- and Rs.5,20,100/- respectively. Therefore, there is a loss of 1,28,500/-. In the case of the appellant in A.S.748/1994 the amount of loss is Rs.1,89,800/-. The loss so caused to the Government is sought to be recovered from the appellants. Section-79 of the Kerala Forest Act reads as follows:- "79. The above sub coups were re-auctioned at an amount of Rs.6,75,100/- and Rs.5,20,100/- respectively. Therefore, there is a loss of 1,28,500/-. In the case of the appellant in A.S.748/1994 the amount of loss is Rs.1,89,800/-. The loss so caused to the Government is sought to be recovered from the appellants. Section-79 of the Kerala Forest Act reads as follows:- "79. Recovery of money due to Government:- All money, other than fines, payable to the Government under this Act or any rule made there under or on account of timber or forest produce or of expenses incurred in the execution of this Act in respect of timber or forest produce or under any contract relating to timber or forest produce including any sum recoverable there under for the breach thereof or in consequence of its cancellation or under the terms of a notice relating to the sale of timber or forest produce by auction or by invitation of tenders, issued by or under the authority of a Divisional Forest Officer, and all compensation awarded to the Government under this Act 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." The above Section empowers the authorities to recover all amounts due including the amounts claimed as loss for re-auction, from the appellants. It has been so held, in the decisions of this Court reported in Vidhyadharan v. State of Kerala (1980 KLT 421) and Bhaskaran Nair v. State of Kerala (1980 KLT 462). The dictum in the above decisions have been confirmed by a Full Bench of this Court in the decision reported in Abdul Rahiman v. Divisional Forest Officer {1988(2) KLT 290(F.B)}. It has been held by this Court that though there was no statutory contract in compliance with the provisions of Section 299 of the Constitution between the Government and the contractor, a statutory liability as distinct from a contractual obligation is fastened on the parties by Section 79 of the Forest Act. On the above basis, it has been held that the amounts claimed by the State can be recovered as a statutory liability under Section 79 of the Forest Act. The same was also a case which was factually similar to the present case. There also, the contractor had not made the stipulated payment after the sale was confirmed. On the above basis, it has been held that the amounts claimed by the State can be recovered as a statutory liability under Section 79 of the Forest Act. The same was also a case which was factually similar to the present case. There also, the contractor had not made the stipulated payment after the sale was confirmed. In this case, it is not disputed that the appellants have committed breach of the contract. The amounts claimed by the Government represent the loss that has been caused by the resale of the rights that were auctioned to the appellants. After analyzing the relevant provisions of law and the judicial pronouncements on the point, the Full Bench has held at page 297 of the above decision as follows:- "Thus under S.79, all money payable to the Government under the terms of a notice relating to the sale of timber or forest produce by auction or invitation of tenders issued by or under the authority of a Divisional Forest Officer, if not paid, when due could be recovered under the law for the time being in force as if' it were an arrear of land revenue." 22. In the light of the above authoritative pronouncement of the law, I find that the respondents are entitled to recover the amounts claimed from the appellants. The findings of the court below on the above issues are correct and do not call for any interference by me. In view of the above, the judgments and decrees in O.S.Nos: 144/1986 and 145/1986 of the Sub Court, irinjalakuda dated 9.4.1992 are hereby confirmed. The appeals fail and are hereby dismissed. No costs.