IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE HARUN-UL-RASHID MONDAY, THE 14TH DECEMBER 2009 / 23RD AGRAHAYANA 1931 AS.No. 906 of 1998(B) --------------------- OS.218/1994 of ADDL.SUB COURT, IRINJALAKUDA .................... APPELLANT: PLAINTIFFS ------------------------------------- 1. THE SECRETARY COCHIN DEVASWOM BOARD THRISSUR 2. THE ASSISTANT COMMISSIONER THIRUVANCHIKULAM DEVASWOM GROUP KODUNGALLUR P.O 3. THE DEVASWOM OFFICER, THIRUVANCHIKULAM DEVASWOM THIRUVANCHIKULAM P.O. BY ADV. SRI.P.KESAVAN NAIR SRI.K.G.CLEETUS SRI.K.GOPALAKRISHNA KURUP,SC,COCHIN D.B RESPONDENT/DEFENDANT ------------------------------------------ VENKIDI @ VENKIDESWARA MALLAN S/O PARARATHA VEETTIL HARI MALLAN METHALA VILLAGE , METHALA DESOM KODUNGALLUR TALUK ADV. SRI.P.RAMAKRISHNAN THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 14/12/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: HARUN-UL-RASHID, J. ---------------------------------------- A.S.No. 906 of 1998 ---------------------------------------- Dated this the 14th day of December, 2009 JUDGMENT The plaintiffs in O.S. No. 218/1994 on the file of the Sub court Irinjalakuda are the appellants. The suit filed for damages on the basis of the alleged breach of contract by the defendant, was dismissed by the trial court. Hence the appeal. The parties hereinafter are referred to as plaintiffs and defendant as arrayed in the suit. 2. The facts in brief are as follows: The 1st plaintiff is the Secretary of Cochin Devaswom Board. The 2nd and 3rd plaintiffs are the Assistant Commissioner and Devaswom officer of the Thiruvanchikulam Devaswom, respectively. For the period of one year from 1.1.1991 to 31.12.1991 the conduct of Vedi Vazhipadu was auctioned on 24.12.1990. The defendant was the successful bidder, having bid it at Rs. 62,550/- The defendant paid ¼ th of the bid amount as per the terms of the tender. The contract commenced from 1.1.1991. During the period of contract the defendant paid the second instalment (another 1/4th of the total bid amount) on 12.3.1991 and executed a Kychit containing the terms of the contract. Subsequently, the defendant made default in subsequent payments viz. the 3rd instalment. In spite of notices issued by the plaintiffs the defendant failed to remit the balance amount. In the circumstances , the plaintiffs were compelled to invite a new tender and the said tender A.S.No. 906 of 1998 -2- was accepted at the highest bid amount of Rs.1607/-. According to the plaintiffs due to the conduct of the new tender and on account of the breach of the contract on the part of the defendant, they sustained a loss of Rs.29,643/-. The present suit was filed for realisation of the lost amount plus interest amounting to Rs. 33,200.16 Ps. 3. In the written statement, it is contended by the defendant that he is not competent to enter into a contract due to his unsoundness of mind and therefore the alleged contract whereby the defendant was made liable to run the vedi vazhipad for one year is not an enforceable one. According to him at the time of making the contract he is not capable of understanding it and of not forming a rational judgment as to its effect upon his interests. The defendant also contended that he is suffering from a mental disease called Paranoid Psychosis and was under treatment in Nayar's Hospital, Ernakulam, from 5.3.1991 till 13.9.1991 and thereafter he continued the treatment as an out patient as a result of which he was unable to discriminate and understand the truth or the conditions or liabilities of the contract. 4. The evidence in this case consists of oral testimonies of PWs 1 to 3, DW1, and Exts.A1 to Ext.A10(a) and B1 to B4. 5. The trial court relied on the evidence of DW1, the Doctor, who stated that he was treating the defendant for Paraboloid Sehizephrenia and that the defendant was under his treatment from 12.7.1992 onwards. The trial court also accepted the evidence of DW1 who testified that the defendant is not competent to enter into a contract due to the defendant's unsoundness of mind and concluded that the A.S.No. 906 of 1998 -3- plaintiffs are not entitled to any reliefs. Ext.B1 Medical Prescription and Exts B2 to B4 Medical certificates issued by Nayar's Hospital shows that the defendant had undergone treatment under the Psychiatrist attached to the Nayar's Hospital from 17.2.1991 to 13.9.1991. The trial court held that the medical prescription and certificates produced by the defendant supports the version of DW1, the Doctor. How can it be said that the medical certificates and prescription issued by the Psychiatrist attached to the Nayar's Hospital can be acted upon to substantiate the claim of the defendant, without examining person who issued it. In this case if the evidence are appreciated properly one can undoubtedly infer that the contention of the defendant to the effect that he is of unsound mind, is without any basis. 6. The auction was conducted on 24.12.1990 The defendant was a successful bidder having bid the auction at Rs.62,550/-. He paid ¼ th of the bid amount as per the terms of the tender. The period of contract commenced from 1.1.1991. On 12.3.1991 the defendant paid the second instalment and executed a Kychit containing the terms of the contract. Subsequently the defendant made default in making payments. The third instalment was due for payment on 10.4.1991 but he did not remit the said amount and the balance amount. Thereafter the plaintiffs issued notices calling upon him to pay to remit the 3rd instalment but the defendant did not turn up. Since the balance amount remains unpaid the plaintiffs invited new tender and the tender was accepted at the highest bid amount of Rs.1,607/- Since the second tender was necessitated due to the failure of the defendant to remit the balance amount and therefore A.S.No. 906 of 1998 -4- the plaintiffs sustained loss, the present suit was filed for realisation of the loss sustained to the plaintiffs. In this circumstances the main question to be decided is whether the defendant is of unsound mind for the purpose of making a contract or not.. The conduct of the defendant proves that at the time when he makes the contract he is capable of understanding it and of forming a rational judgment as to its effect upon his interests. The defendant has no case that he was of unsound mind at the time of making the contract. The circumstances visibly shows that the defendant is purposefully evading the payment of the installment amounts and that he participated in the auction and paid the 1st and second instalments as per the terms of the contract with a sound state of mind. The auction was concluded when the offer made by the defendant was accepted and he was asked to remit the ¼ th of the bid amount(first instalment) as per the terms of the contract. This Court is of the view that the trial court solely relied on the oral evidence of DW1 and held that the defendant was suffering from Paraboloid Schizephrenia and therefore incompetent to enter into a contract due to unsoundness of mind is unsustainable. Simply accepting the evidence of DW1, the trial court ought not have held that the defendant is incapable of making the contract 7. Paranoid Psychosis is a mental dysfunction. The said mental disorder will not prevent the patient from carrying on his normal duties or activities. It is true that the patient may be affected by paranoid psychosis at lucid intervals. So it does not mean that the patient is permanently disabled from doing any activities when he was affected by paranoid psychosis. Here the issue is not the gravity of paranoid Psychosis A.S.No. 906 of 1998 -5- and the main issue to be decided is as to whether the defendant was in a state of sound mind for the purpose of making a contract or not and as to whether he is capable of understanding the terms of the contract and as of forming a rational judgment as to its effect upon his interests or not. Apparently, so long as there is no proof in this case to show that the defendant was unsound mind at the time of making the contract the contentions of the defendant are unsustainable. 8. It is a settled law that for an enforceable contract there should be an offer and an unconditional acceptance and a person who makes such an offer has the right to withdraw it before acceptance,in the absence of a condition to the contrary supported by consideration, that a provisional acceptance cannot make a binding contract, that till the confirmation the person whose bid has been provisionally accepted is entitled to withdraw his bid, that if the acceptance was provisional the same cannot bring about a concluded contract, that when a deposit is condition precedent for the acceptance of the tender, in absence of any power to waive such condition the acceptance cannot be treated as valid without satisfying the condition. In the given circumstances there could be valid confirmation in as much as the ¼ th of the bid amount was deposited as security . 9. In the facts and circumstances discussed above there is confirmation of auction by deposit of ¼ th of the bid amount. Therefore the defendant has no voice to say that there is no confirmation of auction. In this case the plaintiff's burden was discharged by proving the fact that the defendant remitted ¼ th of the bid amount. So the onus is shifted to the A.S.No. 906 of 1998 -6- defendant by adducing evidence that there was no concluded contract for the reason that he is of unsound mind and is incapable of understanding the contents of the contract and is incapable of forming a rational judgment as to its effect upon his interest. The evidence also shows that he was of sound state of mind for making the contract. In the circumstances the appreciation of evidence and conclusion arrived at by the trial court are not justified on facts and legal principles In the result the appeal is allowed. The judgment and decree passed by the trial court are set aside. A decree is passed allowing the plaintiffs to realise from the defendant and his assets a sum of Rs. 33,200.16 with interest at the rate of 9% from the date of suit till realisation The appellants/plaintiffs are also entitled to costs throughout. (HARUN-UL-RASHID, JUDGE) es. HARUN-UL-RASHID, J. --------------------------- A.S. No. 906 of 1998 ---------------------------- JUDGMENT 14th December, 2009