IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR MONDAY, THE 11TH APRIL 2011 / 21ST CHAITHRA 1933 RSA.No. 203 of 2005() --------------------- AS.124/1998 of DISTRICT COURT, KASARAGOD OS.34/1996 of SUB COURT, KASARAGOD .................... APPELLANT/RESPONDENT/PLAINTIFF: -------------------------------------------- A.K.ABOOBACKER, S/O.HASSANKUTTY, PWD CONTRACTOR, MUSLIM, RESIDING AT BEVINJA, CHENGALA VILLAGE, KASARAGOD. BY ADV. SRI.SURESH KUMAR KODOTH RESPONDENT/APPELLANT/DEFENDANTS. ----------------------------------------------- 1. STATE OF KERALA REPRESENTED BY THE DISTRICT COLLECTOR, KASARAGOD P.O., VIDYANAGAR. 2. THE SUPERINTENDING ENGINEER, PWD PROJECT CIRCLE, KANNUR. 3. THE DEPUTY TAHSILDAR, REVENUE RECOVERY, KASARAGOD. 4. THE VILLAGE OFFICER, CHENGALA VILLAGE, CHENGALA. BY GOVERNMENT PLEADER SRI.GOPINATHAN THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 11/04/2011 , THE COURT ON THE SAME DAY PASSED THE FOLLOWING: M.SASIDHARAN NAMBIAR,J. --------------------------------------------- R.S.A.NO.203 OF 2005 --------------------------------------------- Dated 11th April, 2011 JUDGMENT Appellant is the plaintiff in O.S.34/1996 on the file of Sub Court, Kasaragod. Respondents are the defendants. Second respondent is the Superintending Engineer, Project Circle, Kannur and third respondent is the Deputy Tahsildar, (Revenue Recovery) and fourth respondent, the Village Officer. The suit was instituted for a declaration that no amount is due from the appellant and Rs.20,399/- claimed under two notices sent by the respondents under the Revenue Recovery Act, are not recoverable and for a permanent prohibitory injunction restraining respondents from taking further proceedings RSA 203/05 2 under the provisions of Revenue Recovery Act. 2. Appellant was awarded the contract work of improvement to ABC from ch:6075m to 6225m of P.I.P Division, Kannur. Ext.B1 agreement was executed on 3/5/1986. Ext.B1 provides the details of work to be carried out. Work is to be completed within three months from the date of handing over of the site. The site was handed over on 30/5/1986. Therefore, the work should have been completed by 29/8/1986. As the appellant did not complete the work and stopped the work, Ext.B7 notice was sent on 26/8/1987 calling upon the appellant to resume the work within seven days of receipt of the notice. Ext.B8 reply was sent by the appellant promising to resume the work and to complete it by October, alleging that the work could not be completed as he was in financial difficulties on account of the RSA 203/05 3 failure of the department to honour the bill in respect of some other works. As appellant did not resume the work as promised in Ext.B8, Ext.B10 notice was sent on 5/9/1988 directing appellant to resume the work within seven days threatening that the work will be terminated on his failure. Ext.B12 reply was sent on 21/9/1988 by the appellant seeking time for completing the work projecting financial difficulties for the delay. As the appellant did not resume the work, Ext.B13 notice was sent on 27/4/1989 directing appellant to resume the work within seven days of receipt of the notice. But appellant did not resume the work and instead sent Ext.B15 reply dated 22/5/1989 stating that it was due to his physical illness and the failure to get the bill in respect of other works, the work could not be resumed. He sought further time to complete the work. Still RSA 203/05 4 appellant did not resume the work. Hence another notice was sent on 24/5/1989. Appellant sent Ext.B16 reply dated 30/5/1989 seeking further time stating that failure to resume the work was his illness and financial difficulties. As the appellant did not resume the work even thereafter, Ext.B17 notice dated 30/6/1989 was sent intimating the termination of the contract at the risk and liability of the appellant. Ext.B20 termination order was then issued on 26/8/1989. On the allegation that the appellant did not return the 283 precast slabs and he was not present when the measurement of the work was carried out, Ext.B21 notice dated 19/9/1989 was sent calling upon the appellant to return the slabs. Appellant sent Ext.B22 reply stating that all the slabs except 80 were returned. Ext.B23 notice was again sent calling upon the RSA 203/05 5 appellant to return the materials. The proceedings under the Revenue Recovery Act was initiated to realise Rs.24,136/- being the cost of the materials and Rs.9,669/- being the value of 12.80 MT cement at penal rate and interest. Appellant then instituted the suit seeking a declaration that no amount is due from him. Respondents resisted the suit contending that Rs.20,399/- is liable to be paid by the appellant being the value of the materials supplied, with the interest, pointing out that under the agreement, the amount could be realised under the Revenue Recovery Act. It was also contended that as Ext.B1 agreement provides for re-tender, if any loss is sustained by the department on account of re-tender, appellant is liable to pay the same also. It was contended that appellant is not entitled to the decree sought for. RSA 203/05 6 3. No oral evidence was adduced by the appellant and the respondents. On the side of the appellant Exts.A1 to A3 and on the side of the respondents Exts.B1 to B23 were marked. Learned Sub Judge on the evidence found that as held by the Apex court in State of Karnataka v. Rameshwar Rice Mills (AIR 1987 SC 1359) one party to the agreement cannot be an arbiter of his own cause and as there was no independent assessment of damages, if any payable, respondents are not entitled to realise the same by revenue recovery proceedings. A decree was granted restraining respondents from proceeding under Exts.A2 and A3 notices issued under Revenue Recovery Act. The relief of declaration was not granted. Appellant did not challenge the non granting of the declaration sought for. Respondents filed A.S.124/1998, challenging the judgment RSA 203/05 7 contending that Ext.B1 agreement provides for realisation of damages by recourse to revenue recovery proceedings and as held by Full Bench of this Court in Abdul Rahiman v. Div.Forest Officer (1998 (2) KLT 290 FB), the State is competent to realise the damages, without quantifying the damages by an independent body as breach of the contract is admitted. The learned District Judge set aside the findings of the learned Sub Judge and allowed the appeal and dismissed the suit. It is challenged in the second appeal. 4. Appeal was admitted formulating the following substantial questions of law. a) Has the lower appellate court acted in accordance with law in allowing the appeal in reversal of the decree and judgment passed by the trial court ? RSA 203/05 8 b) Was the lower appellate court justified in holding that the decision of the Hon'ble Supreme Court in State of Karnataka v. Rameshwar Rice Mills (AIR 1987 SC 1359), relied on by the trial court has no application ? c) Was the lower appellate court right in holding that the plaintiff committed breach of contract and thus liable for damages in the facts and circumstances of the case ? d) Did not the lower appellate court erred in holding that suit for injunction cannot be maintained, when the very claim based thereon the Revenue Recovery proceeding initiated is unsustainable in law ? 5. Learned counsel appearing for the RSA 203/05 9 appellant and learned Government Pleader appearing for the respondents were heard. 6. Though learned Sub Judge relied on the decision of the Apex Court in Rameshwar Rice Mills's (supra) and held that though breach of the contract is not disputed, and Ext.B1 agreement provides for assessing the damages by the State, for enabling the State to recover the amount due under the provisions of Revenue Recovery Act, quantifying damages by an independent body is mandatory and as it was not done, held that appellant is entitled to a decree restraining the realisation of the amount. The learned District Judge relying on the decision of the Full Bench of this court in Abdul Rahiman v. Div.Forest Officer (1998 (2) KLT 290) held that when the agreement provides for realisation of the damages by the provisions of Revenue Recovery Act and the RSA 203/05 10 fact that the contract was broken is not necessary to quantify the damages by an independent body. Argument of the learned counsel is that when the contract is a reciprocal contract, and the respondents have broken the contract, first appellate court should have found that before quantifying the damages by an independent body, respondents are not entitled to realise the amount based on their own assessment. Learned counsel argued that as per Exts.A1 to A3, the amount sought to be recovered is the alleged damages sustained on account of non return of the cement and the materials supplied and no evidence was adduced either to prove entrustment or the failure to return the same and though Exts.B3 and B4 measurement books were produced, when no oral evidence was adduced, there is no material to support the RSA 203/05 11 findings of the first appellate court that the amount is due from the appellant to the State, so as to realise it under the provisions of the Revenue Recovery Act. It is therefore, argued that appeal is only to be allowed. 7. Learned Government Pleader submitted that when Ext.B1 provides for realisation of the amount due under the agreement by recourse to the provisions of Revenue Recovery Act, the suit for declaration that no amount is due is not sustainable. It is pointed out that the suit is not for fixation of damages or for quantifying the damages and instead only for a declaration that no amount is due and when Ext.B1 provides that appellant is liable for the damages, a decree cannot be granted in his favour. 8. The notices and the replies exchanged between the respondents and the RSA 203/05 12 appellant, establish that though by Ext.B8 reply dated 28/9/1987 appellant had promised to resume the work and complete it without causing further delay, appellant did not resume the work Ext.B16 letter dated 30/5/1985 shows that appellant had not resumed the work thereafter. Though it is contended in the plaint that respondents have violated the reciprocal contract, even Ext.B16 reveals that there was any such breach of the conditions of the contract by the respondents. Instead, in spite of the promise made under Ext.B9, appellant had not resumed the work. It is thus not disputed that the contract was broken. Even though appellant had contended that being a reciprocal agreement respondents have broken the contract, appellant had no such case in any of the replies sent by him. Evidence establish that though appellant promised to resume the RSA 203/05 13 work, he did not resume the work. Evidence thus establish that the contract was broken by the appellant. 9. In the light of the said factual finding, as declared by the Full Bench of this Court in Abdul Rahiman's case (supra), it can only be found that the contract was broken by the appellant and therefore, for realisation of the amount under the provisions of Revenue Recovery Act as provided under Ext.B1, assessment of damages by an independent body is not necessary. 10. Though learned counsel appearing for the appellant argued that there is no evidence to prove that any material was supplied and not accounted by the appellant, a decree cannot be granted that appellant is not liable to pay any amount, as sought for. Exts.B3 and B4 measurement books contain RSA 203/05 14 endorsements made by the appellant that measurement of the work carried out were recorded correctly. Evidence establish that appellant had not accounted for the materials as contended by the respondents. In such circumstances, he is liable to pay the value of the materials with interest. The suit is not for quantifying the damages or fixation of damages payable. In such circumstances, if it is to be found that appellant is liable to pay the value of the materials and also the excess amount payable by the department on account of re-tender, appellant is not entitled to a decree for injunction granted by the trial court or a decree that respondents are not entitled to realise any amount. Ext.B1 provides for realisation of the amount by revenue recovery proceedings. Exts.B3 and B4 establish that entire materials supplied were not RSA 203/05 15 accounted. It is for the value of the materials, with interest revenue recovery proceedings were initiated. As rightly found by the first appellate court, appellant is not entitled to the decree sought for or granted by the learned Sub Judge. Hence I find no merit in the appeal. Appeal is dismissed. No costs. M.SASIDHARAN NAMBIAR, JUDGE. uj.