R.S.A. No. 225 of 1985 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH R.S.A. No. 225 of 1985 Date of decision: 05.02.2010 State of Haryana and others ....Appellants Versus Chaudhary Ram ....Respondents CORAM: HON'BLE MR. JUSTICE VINOD K. SHARMA Present: -Mr. Ajay Singh Ghangas, Addl. A.G., Haryana. VINOD K. SHARMA, J.(ORAL) This regular second appeal by the State of Haryana, is directed against the judgment and decree dated 29.9.1984, passed by the learned Courts below, vide which the suit filed by the plaintiff/respondent for permanent injunction, restraining the defendant/appellants from recovering the amount in pursuance to the notice of recovery, stands decreed. The case set up by the plaintiff/respondent was, that dead trees were auctioned by the State of Haryana on 30.9.1977. The plaintiff/respondent was the highest bidder, as he had given bid of Rs.50,200/- (Rupees fifty thousand and two hundred only). The bid of the plaintiff/respondent was accepted on 21.11.1977, and on conveying the acceptance, the plaintiff/respondent deposited first instalment of bid amount on 30.11.1977. The plaintiff thereafter started cutting dead trees and paid second instalment on 21.3.1978. However, he failed to pay the third instalment, which was due on 30.10.1978. On 6.11.1978, a letter was written by the plaintiff, pointing out to the State that he was not being allowed to remove the trees as the land had been auctioned to some other person. The R.S.A. No. 225 of 1985 -2- plaintiff, therefore, claimed that no amount could be recovered from the plaintiff/respondent for the reasons that there was no written contract entered into between the parties, and on the ground that though the contract was up 30.3.1979, the State of Haryana auctioned the land where the dead trees were standing, for the period January, 1978 to October, 1978. The suit was contested, wherein plea was raised, that the suit was not competent for want of notice under Section 80 of the Code of Civil Procedure. On merit, it was pleaded that once the plaintiff/respondent had entered into a contract, he was bound to pay the contract amount as there was no obstruction in execution of the contract. The learned trial Court decreed the suit for want of written contract between the parties. The judgment and decree was challenged by the State of Haryana before the learned lower appellate Court, by taking a plea that the contract between the parties stood proved by positive evidence, therefore, it could not be a ground to decree the suit filed by the plaintiff/respondent. The learned lower appellate Court affirmed the finding of the learned trial Court and held, that in absence of a written contract, the amount of instalment could not be recovered. In addition, the learned lower appellate Court also held, that due to auction of land for the period January, 1978 to October, 1978, the State violated the terms of the contract, therefore, was estopped from claiming the amount. The appeal was also dismissed. The learned Additional Advocate General, Haryana, contends that this appeal raises the following substantial questions of law: - “1. Whether the learned Courts below were justified in R.S.A. No. 225 of 1985 -3- decreeing the suit for written contract in the facts and circumstances of the case? 2. Whether the State in absence of any evidence showing obstruction in the contract, was entitled to recover the amount of third instalment?” In support of the first substantial questions of law, referred to above, the learned Additional Advocate General, Haryana, vehemently contended, that in this case, the terms of auction were duly accepted by the plaintiff/respondent, and as a token of acceptance of the terms of auction, he had not only deposited first instalment but even second instalment. The contract was complete between the parties and could not be a ground to decree the suit for injunction filed by the plaintiff/respondent. It was contended that once, the terms of auction were accepted and instalments paid, it could not be said that there was no written contract between the parties, as the terms of auction was in writing, and the bid was accepted after following due process. On consideration, I find force in the contentions raised by the learned Additional Advocate General, Haryana. The first substantial question of law is answered in favour of the State, and it is held that mere non-execution of contract, could not debar the State claiming third instalment, in view of the fact that the terms of the auction Ex. D1 were duly accepted by the plaintiff/respondent, which were in writing. This fact stood further proved from deposit of instalments, and also the fact that bid by appellants was accepted after following due process. On second substantial question of law, the learned Additional Advocate General, Haryana, contended that in absence of any evidence to the contrary, it was not open to the learned Courts below to decree the suit merely because the State auctioned the land for the period January 1978 to October, 1978. This plea of the learned State counsel cannot be accepted. R.S.A. No. 225 of 1985 -4- Once, the contract was entered into with the plaintiff/respondent, it was not open to the State to have auctioned the land to third party. The plaintiff/respondent proved the factum of auction of land in favour of third party, which resulted in breach of contract on the part of the State. The learned lower appellate Court, therefore, was justified in holding, that the conduct of the State, in auctioning the land to third party amounted to the breach of contract. The appellants, therefore, were not entitled to recover the instalment, which was due for the period from 21.3.1978 to 30.10.1978 i.e. the period for which there was breach by the State. The second substantial question of law is answered against the State. In view of the finding recorded on second substantial question of law, no ground is made out to interfere with the judgment and decree passed by the learned Courts below. The appeal is accordingly dismissed, but with no order as to costs. (Vinod K. Sharma) Judge February 05, 2010 R.S.