IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.P.BALACHANDRAN THURSDAY, THE 10TH JULY 2008 / 19TH ASHADHA 1930 SA.No. 506 of 1995(B) ----------------------------------- AS.12/1992 of DISTRICT COURT, ALAPPUZHA OS.92/1989 of ADDL.SUB COURT, ALAPPUZHA .................... APPELLANT/RESPONDENT/PLAINTIFF: P.C.JOSEPH, S/O CHERIYAN, ROSE NIVAS, KARUMADY P.O., AMBALAPUZHA, ALAPUZHA DISTRICT. BY ADV. SRI.P.R.VENKETESH RESPONDENTS/APPELLANTS/DEFENDANTS: 1. THE STATE OF KERALA REP. BY THE CHIEF SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM. 2. THE COMMISSIONER & SECRETARY, DEPARTMENT OF FOOD & CIVIL SUPPLIES, GOVT. OF KERALA, SECRETARIAT, THIRUVANANTHAPURAM. 3. THE DISTRICT SUPPLY OFFICER, ALAPUZHA. 4. THE DISTRICT COLLECTOR, ALAPUZHA. BY GOVERNMENT PLEADER SRI.L.G.SURESH BABU THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 10/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.P. Balachandran, J. --------------------------- S.A.No.506 of 1995 --------------------------- JUDGMENT The plaintiff in O.S.No.92/89 on the file of the Sub Court, Alappuzha being aggrieved by the judgment of the first appellate court in A.S.No. 12/92, reversing the decree passed in his favour by the trial court and dismissing the suit, is the appellant in this second appeal. Respondents are the defendants in the suit, who were the appellants before the first appellate court. 2. The appellant/plaintiff was a contractor for transporting paddy from various societies in Kuttanad area to the depots of the Kerala State Warehousing Corporation. The contract for carrying out such transport works was between the plaintiff and the defendant/State as evidenced by Exhibit B2 agreement dated 27.6.1980. After the completion of the work by the plaintiff, it was found that there was short delivery of paddy, the quantity of which was found to be 326.28 quintals and he was directed SA 506/95 2 to remit the value at the levy rate. The plaintiff alleged so many reasons to justify the shortage so found. According to the plaintiff, he has paid Rs.11,450/- as demurrage and waiting charges to the labourers and owners of canoes; that as per the agreement, he is entitled to get Rs.44,054.71 towards the transportation charges and the same was admitted by the Special Tahsildar, Alappuzha in his proceedings dated 30.3.1981; that out of the total quantity of 60,000 quintals of paddy transported from various societies, the shortage found was 326.28 quintals; that as per the agreement the plaintiff was bound to pay three times the cost of paddy so found short; that when the Government started taking steps for realising the loss, the plaintiff filed appeal to the Government and the Government, after considering the appeal, issued Exhibit A2 order dated 24.1.1985, giving allowance of 4 kg. per metric tonne and ordered that for the balance the plaintiff shall pay the shortage value SA 506/95 3 at Rs.135/- per quintal, which was the procurement rate; that the plaintiff had agreed to the same; that the third defendant issued an order requesting him to remit Rs.35,407.80 within one week; that he was agreeable for the same and he requested the Government to set off the said amount from the amount due to him including the security amount and to disburse the balance amount to him; that with a view to wreak vengeance against the plaintiff, the Commissioner and Secretary to Government issued letter dated 20.12.1986 informing that Government propose to review their earlier order dated 24.1.1985 and calling for objections, if any, to be filed within thirty days on receipt of the said letter; that the plaintiff gave his reply on 27.1.1987, but, no action was taken by the Government and finally, order dated 15.2.1988 was issued to him requesting him to attend hearing of the petition on 29.2.1988; that though the plaintiff attended the meeting with his counsel, SA 506/95 4 the Minister was not inclined to hear them and assured that orders would be passed in his file; but that, to his surprise, he received Government Order dated 30.12.1988 (Exhibit A4) on 6.2.1989 informing him that he is not entitled to any concession for the shortage and that the value of the shortage will have to be recovered from him as per the provisions in the agreement and thereby the earlier order Exhibit A2 was modified. 3. The plaintiff contended that Government had no authority to review its earlier order; that Exhibit A4 order was passed to victimise him, as he had filed O.S.No.365/83 against the Government; that by Exhibit A2 order, Government has waived their rights to take penal steps against him and he has acted on the basis thereof and Government is, hence, estopped from reviewing that order; that the defendants are trying to attach his immovable properties and that Government Order dated 30.2.1988 is void for want of jurisdiction and SA 506/95 5 authority and it is liable to be so declared and that if the defendants are not restrained from taking steps against him, he will be put to irreparable sufferings. Hence the suit. 4. Defendants filed a joint written statement contending that the suit is not maintainable; that as per proceedings dated 25.6.1989 the plaintiff was appointed as transporting contractor as alleged; that a quantity of 4728.17.000 quintals of paddy was entrusted by the Pulinkunnu Society No.4015 to the plaintiff for transportation, but he has released only a quantity of 4403.50.800 quintals of paddy to the Warehouse Superintendent, Thakazhy and thereby there was a shortage of 324.66.200 quintals; that on finding such shortage, a show cause notice was served on the plaintiff; that the plaintiff had submitted his explanation and based on his explanation and connected records, final order was passed directing the plaintiff to remit Rs.1,41,227.97 being three times the cost of SA 506/95 6 shortage within the stipulated time; that the plaintiff thereafter approached the Board of Revenue and Government requesting to cancel the said order; that the authorities rejected his request; that Rs.41,054.71 has been adjusted against the liability of Rs.1,41,227.97 and Rs.5,000/- furnished towards security by the plaintiff is also set off; that revenue recovery steps were initiated for recovering the balance amount of Rs.95,173.26, but, the plaintiff filed original petition before this Court against the order passed by the Government; that the said original petition was dismissed without prejudice to the plaintiff's right to file suit; that there were sufficient godown facilities for storage of paddy; that the paddy purchased from the Pulinkunnu Society was stored in the Oottupura at Ambalapuzha; that there was no necessity to keep the paddy in country boats as alleged; that there was no abnormal shortage of paddy from another societies SA 506/95 7 and abnormal shortage was noticed only in the case of Pulinkunnu Society; that if there was any difference in weight, the plaintiff was at liberty to demand reweighment; that the paddy taken by the plaintiff was in good condition and checked by the Special Village Staff authorised by the District Supply Officer, Alappuzha before entrusting it to the contractor; that the plaintiff had admitted in receipt that he had accepted paddy in good condition from the Village Staff and no shortage had been reported by other contractors appointed for the said purpose; that the Government passed Exhibit A2 order allowing shortage of 40 kg. per 10 metric tonne of paddy on 24.1.1985; that thereafter it was found improper to allow shortage to the contractor, as the paddy lifted by the Contractor from the Pulinkunnu Society has been completely delivered and the paddy lifted on 8.7.1980 has been delivered in full on 10.7.1980; that out of the quantity of 324.66.200 quintiles of paddy, there SA 506/95 8 was a short delivered of 320.33.400 quintiles lifted from the Pulinkunnu Society on 22.7.1980; that the plaintiff is, therefore, not entitled to any shortage allowance; that the paddy short delivered was misappropriated by him and that therefore, the Government reviewed its earlier order and issued orders to realise the entire cost of the shortage; that the allegation that demurrage had to be paid for the canoes, etc. are not correct; that the further allegation that shortage was as a result of paddy having been kept on the road side and canal side for one to seven days is also not correct; that only the actual transporting time was taken for transporting paddy taken delivery of for transportation; that the order issued by the Government in the circumstances, is legally binding on the plaintiff and is issued with proper authority; that no amount is due to the plaintiff as alleged and that steps have been taken by the Government only for violation of the terms SA 506/95 9 and conditions of the contract. On the above contentions, the defendants prayed for a dismissal of the suit. 5. The appellant/plaintiff filed a re-joinder alleging further that the contention that shortage from the Service Co-operative Society No. 4015 at Pulinkunnu was for 324.02 quintiles is incorrect; that he has given the details of shortage in paddy taken delivery of from various societies and according to him, the main reason for the shortage was that weighing of paddy was not done in his presence; that when the paddy was collected, it was mixed with sand and soaked in mud and was kept in gunny bags and handled 2-3 times and thereby the weight was reduced, as the paddy soaked in mud got dried up; that he had to carry the paddy at first in country boat and then in lorry and sometimes by bullock carts and during this transit, the gunny bags often got burst and the weight is considerably reduced; that there was no sufficient godown SA 506/95 10 facilities and it had to be kept for about 5-7 days without unloading and he had to pay demurrage charges to the thirty one country boats; that that fact was represented to the Minister for Civil Supplies, Kerala and that the Government, after obtaining detailed report from the Director of Civil Supplies, issued order dated 24.1.1985 (Exhibit A2) and accordingly, the third defendant issued letter dated 12.12.1985 requesting him to remit Rs.35,470.80 for which, he submitted a reply requesting to adjust that amount as against Rs.41,054.71 due to him towards transporting charges and also Rs.5,000/- furnished by him by way of security, but no action was taken and thereafter Exhibit A4 order dated 30.12.1986 was issued. He further contended that thereafter the plaintiff filed a petition before the District Supply Officer and that was dismissed; that he filed appeal on 21.7.1987, but that was disposed of and in the meantime, he received a notice on 15.2.1988 to SA 506/95 11 attend at a meeting on 29.2.1988; that without considering his appeal, the Government issued Exhibit A4 order dated 30.12.1988 and that the Government had no authority to review its earlier order and the said order is illegal and unsustainable. 6. On the above pleadings the trial court raised necessary issues for trial and considering the case in the light of the evidence adduced at trial, which consisted of oral evidence of PWs 1 to 3 and DW1 and documentary evidence Exhibits A1 to A7 and B1 to B3(i), decreed the suit declaring Government Order dated 30.12.1988 as ab initio void and restraining the defendants from taking any proceeding against the plaintiff pursuant to the said order and allowing the plaintiff to recover Rs.10,446.91 with future interest at the rate of 6% per annum from the defendants. Plaintiff was also allowed to recover the proportionate costs from the defendants. SA 506/95 12 7. The defendants filed A.S.No.12/92 before the first appellate court assailing the decree so passed and the first appellate court, which heard the appeal, allowed the appeal setting aside the decree passed by the trial court and dismissed the suit. Hence the Second Appeal by the aggrieved plaintiff, assailing the decree passed by the first appellate court. 8. The Second Appeal was admitted on the following substantial questions of law formulated in the memorandum of appeal: “(a) While passing Exhibits A2, A4 and A7 was not the authority exercising quasi judicial powers? (b) In the exercise of quasi judicial power by any authority, unless there is a power of review by the authority, can the authority exercise the power of review? (c) Is there any time limit within which the power of review could be exercised by an authority even if there is such a power invested in the authority?” SA 506/95 13 In the course of hearing, as it was found necessary to formulate an additional substantial question of law, the following additional substantial question of law was also formulated:- “Whether the respondents are estopped from passing Exhibit A4 order by reason of promissory estoppel arising from the appellant having acted on the promise contained in Exhibit A2 order?” 9. It is not in dispute before me that the authorities, which issued Exhibits A2, A4 and A7, are authorities exercising quasi judicial powers. Exhibit A2 is an order issued by an Additional Secretary and Annexure-A4 is an order issued by a Joint Secretary, both professing to be the orders issued by order of the Governor, whereas, Exhibit A7 is a letter issued by the second defendant, the Commissioner and Secretary, Department of Food and Civil Supplies, Government of Kerala, Secretariat, SA 506/95 14 Thiruvananthapuram calling upon the appellant/ plaintiff to file written objections, if any, within thirty days from the date of receipt of the said letter, proposing to revise Exhibit A2 order. The appellant/plaintiff has filed objection also thereto. However, ignoring and rejecting the objection, Annexure-A4 order was passed reviewing Exhibit A2 order. 10. The learned Government Pleader has no case that when a quasi judicial order is passed, the Government is having inherent jurisdiction to review the said order and to pass orders deviating from the earlier order to the detriment of the party affected by the earlier order. 11. In the instant case, a lenient view was taken by the Government in the case of the appellant while passing Exhibit A2 order and the said leniency was withdrawn and penalty, as envisaged in the contract, was implemented, vide Annexure-A4 order reviewing its earlier Exhibit A2 SA 506/95 15 order. In the circumstances, Annexure-A4 order passed on 30.12.1988 is without jurisdiction and is void. 12. By Exhibit A2 order, Government was extending a benefit to the appellant showing leniency to him. On the basis of the benefit so conferred by Exhibit A2 order, though it cannot be said that the appellant has acted to his detriment, he has acted on the basis thereof and had submitted Exhibit A3 application seeking permission to disburse only the balance amount that is due to him under the contract entered into with the Government after appropriating the loss calculated as per Exhibit A2 order. Thus, when the appellant has acted on the basis of Exhibit A2 order and submitted Exhibit A3 application in compliance with Exhibit A2 order, that operates as a promissory estoppel and the appellant cannot be called upon, by Exhibit A4 order, to remit huge amounts withdrawing the benefit conferred on him vide SA 506/95 16 Annexure-A2 order. Viewed in that perspective also, Annexure-A4 order passed by the Government is illegal and void. For all the above reasons, reversing the judgment and decree of the first appellate court, I allow this appeal and restore the judgment and decree passed by the trial court in favour of the appellant. Parties shall bear their own costs. 10th July, 2008 (K.P.Balachandran, Judge) tkv SA 506/95 17 K.P.Balachandran, J. --------------------- S.A.No. 506 of 1995 --------------------- JUDGMENT 10th July, 2008