N.K. MOHAMMED v. OLAVANNA PANCHAYATH

The defendant in O.S.No.861 of 1993 on the file of the Court of the Subordinate Judge of Kozhikode is the appellant in this appeal. The respondent is the plaintiff therein. The suit instituted by the respondent for realisation of the sum of Rs.39,644.85 together with interest thereon at 12% per annum on the principal sum of Rs.33,315/- from the date of suit till realisation was decreed as prayed for. Hence this appeal.

The plaintiff is the Olavanna Grama Panchayat. The right to remove sand from the Chaliyar river flowing through the Olavanna Grama Panchayat was sold in public auction held on 29.2.1992, pursuant to Ext.A1 auction notice dated 13.2.1992. The appellant was the successful bidder in the auction and the right to remove sand from the Chaliyar river for the period from 1.4.1992 to 31.3.1993 was knocked down in his favour for the sum of Rs.50,050/-. As per the terms of Ext.A1, the appellant deposited the sum of Rs.1000/- as security deposit on the date of auction and Ext.B1 receipt was thereupon issued to him. Though as per Ext.A1 notice, the successful bidder was bound to remit 1/3rd of the bid amount immediately, the appellant remitted the same only on

14.3.1992 as is evident from Ext.B2. The appellant thereafter entered AS 71/97 -: 2 :- into Ext.A3 agreement on 16.3.1992 with the plaintiff.

As per the terms of Ext.A3, the appellant had to remit the balance bid amount in 8 instalments of Rs.3,818/- during the period from May to December, 1992 and the balance Rs.3,821/- as the last instalment in January, 1993. The appellant did not remit the instalments. The Panchayat thereupon issued Ext.A4 notice dated

5.5.1992 calling upon him to remit the instalments that have fallen in arrear together with interest. The appellant did not reply to Ext.A4 notice. The Panchayat thereafter issued Ext.A5 notice dated 17.10.1992 calling upon the appellant to remit the arrears failing which he was informed that the right to remove sand will be re-auctioned at his risk. The appellant did not remit the arrears. Instead, he sent Ext.B3 letter dated 24.11.1992 disputing his liability to pay the amount. He contended that as the road to the river bed was not motorable he could not remove sand. The Committee of the Panchayat that met on

12.1.1993 considered the reply sent by the appellant and resolved to cancel Ext.A3 agreement and to re-auction the right to remove sand at the risk and cost of the appellant. The resolution of the Panchayat is evidenced by Ext.A6. The appellant was informed of Ext.A6 resolution in Ext.A4 letter dated 13.1.1993. A re-auction was held on 29.1.1993 and the right to remove sand during the period from 29.1.1993 to 31.3.1993 was knocked down in favour of a Society for the sum of Rs.1050/-. In the suit, the Panchayat sought to recover the loss sustained by it in the re- AS 71/97 -: 3 :- auction conducted on 29.1.1993.

The appellant resisted the suit contending that he had entered into Ext.A3 agreement on the assurance given by the Panchayat and that the road to the river bed would be rendered motorable, that as the road was not rendered motorable, he could not collect or remove sand from the river bed and that he is therefore entitled to refund of the security deposit and the advance remitted by him. He also filed a counter claim seeking refund of the sum of Rs.16,685/- deposited by him. The trial court on an analysis of the evidence oral and documentary available in the case held that the case set up out the appellant that he could not remove sand as the road to the river bed was not motorable cannot be accepted. The suit was accordingly decreed as prayed for.

Sri.P.A. Harish, the learned counsel appearing for the appellant contended that the judgment of the court below is not sustainable in law and the evidence on record. The learned counsel for the appellant also contended that the court below has not taken note of the testimony tendered by PWs 2 and 3 who were former members of the Panchayat in support of the defendant's contention that the road to the river bed was not motorable. The learned counsel for the appellant further contended that as the road was not motorable, the defendant could not remove sand and as the Panchayat did not take steps to provide access to the river bed, the contract stood frustrated.

It is not in dispute that after the initial deposit of Rs.1000/- on AS 71/97 -: 4 :- the date of auction, namely, 29.2.1992 and 1/3rd of the bid amount namely Rs.16,685/- on 4.3.1992, the appellant has not remitted the amounts payable by him under Ext.A3 agreement. As the appellant did not remit any of the instalments payable under Ext.A3 agreement, the Panchayat issued Ext.A4 notice dated 5.5.1992 calling upon him to remit the arrears of instalments due. The appellant did not reply to the said notice. Later, Ext.A5 notice dated 17.10.1992 was issued to which he sent Ext.B3 reply, wherein for the first time, he contended that he could not remove sand as the road to the river bed was not motorable. The Panchayat thereafter proceeded to consider the issue and decided in the meeting that held on 12.1.1993 to cancel the auction in favour of the appellant and to re-auction the right to remove sand at the risk and cost of the appellant. In the re-auction the price fetched was only Rs.1,050/-. Ext.A3 authorised the Panchayat to recover from the successful bidder in the first auction the loss if any sustained by it in the re-auction. The evidence on record proves that the appellant did not remit the instalments payable as per Ext.A3 agreement and therefore, the Panchayat was forced to re-auction the right to remove sand for a nominal sum of Rs.1,050/-. The Panchayat thereby sustained a loss of Rs.33,315/-. The only ground on which the appellant resisted the suit was that the road to the river bed was not motorable and therefore he could not remove sand. His contention is that as the Panchayat and its officials had not made the road motorable as promised, the contract AS 71/97 -: 5 :- stood frustrated.

In my opinion, as rightly noticed by the court below, there is no evidence in support of the said plea. Ext.A3 does not refer to any such undertaking or condition. No material has been produced before the court below or this Court to establish the appellant's contention that the road to the river bed was not motorable and that he had no access to the river bed. In fact, there is no material before this Court to come to the conclusion that the road leading to the river bed was not motorable as claimed by the appellant. Therefore, the plea of the appellant that he did not remit the instalments as he was not in a position to remove sand does not merit acceptance. The appellant however relies on the testimony tendered by the defence witnesses examined as DWs 2 and 3 in support of his contention that the road was not motorable. As rightly noticed by the court below, the appellant has not taken out a Commission to ascertain whether the road to the river bed was motorable or not. He has not also taken steps to summon and call for documents to prove that the road was repaired after the re-auction. The testimony tendered by DWs 2 and 3 cannot in my opinion be relied on to hold that the road to river bed was not motorable. In other words, there is no cogent material before this Court to come to the conclusion that the appellant had no access to the river bed and that he was thereby disabled from extracting and removing sand. I therefore agree with the court below that the appellant is liable to AS 71/97 -: 6 :- make good the loss sustained by the Panchayat in the re-auction. For the reasons stated above, I hold that there is no merit in this appeal. The appeal fails and is accordingly dismissed. No costs. P.N.Ravindran, Judge.