Case: Syed Israr Masood, Forest Contractor, Ret Ghat, Bhopal Vs. State of Madhya Pradesh

the trees standing on the bank of Nalla by stating as follows:"But there is nothing in the plaintiffs complaints to the Department at any stage alleging that this reservation had been made after the auction had taken place. The idea appears to be an after-thought. The mere oral statement of the plaintiff and his witnesses that this marking for reservation ha d taken place after the auction, on the basis that they did not see these markings about reservation of the trees near the Nalla when they had gone to that forest on earlier occasions, are wholly insufficient to come to the conclusion that the Nalla area had been reserved after the auction. The aforesaid reasoning is based entirely on the assumption that in one of the complaints preferred by the plaintiff before the Department officers, it had been alleged by h im, that the reservation of the trees on the bank of Nalla had been made after the auction had taken place. A mere reference to Exh. P-l is sufficient to show that the aforesaid assumption made by the High Court is wholly erroneous. Exh. P-l is a copy of the representation dated December 28, 1960 submitted by the plaintiff to the Divisional Forest officer (East), Bhopal. In paragraph 4 thereof, the plaintiff had stated as follows:"That the applicant inspected the coupe in or about the first week of November 1960 to give the coupe boundary certificate as is required under Clause 2 of the draft agreement deed. During this inspection the applicant was surprised to know that there were numerous irregularities committed in the marking of trees and huge area containing the Forest Produce marked for sale in the said coupe was subsequently reserved." (underlining supplied) Thus, the correct factual position is that the plaintiff had categorically complained to the Department that a substantial area containing the forest produce, which had all been originally marked for sale, had been subsequently reserved, with the result that the quantity of timber available for extraction had become substantially reduced, The criticism made by the High Court that the argument advanced by the plaintiff was the result of an after-thought, was therefore not justified. 9. We may at this stage refer to Condition No. 3 in the sale notice (Exn. D/l) on which strong reliance was placed on behalf of the respondent. That condition reads:"The details of quantities of forest produce announced at the time of auction are correct to the best of the knowledge of the Divisional Forest officer but are not guaranteed to any extent The intending bidders are, therefore, advised to inspect on the spot the contract area and the produce they intend to bid for with a view to satisfy themselves about its correctness. No claim shall lie against the State Government for compensation or any other relief, if the details of the quantities are subsequently found to be incorrect". In our opinion, the trial court was perfectly right in its view that, while the said condition will operate to prevent the Contractor from claiming any damages or compensation from the State Government on the ground that the details of the quantity of the forest produce were subsequently found to be incorrect, it will not preclude him from repudiating the contract on its being found that there was substantial variance between the particulars furnished at the time of the auction regarding the quantity and quality of timber that will be available for extraction in the concerned coupes and the quantity etc. Of tree growth actually found to be available on the site. It has been clearly established by the evidence in this case that a very substantial quantity of timber standing on the bank of Nalla had been marked for extraction and numbered and the auction sale had been held on the basis that the highest bid der would be entitled to fell and remove all those trees. But by the time the coupes were allowed to be inspected by the auction- purchaser, that area was declared to be "reserved", with the result that there was a complete prohibition against th e felling of any timber therefrom. This has substantially altered the very foundation of the contract and hence it was perfectly open to the plaintiff to repudiate the contract and claim a refund of the amount deposited by him as a part payment of the purchase price. 10. We are unable to agree with the view expressed by the High A Court that "the plaintiff cannot succeed unless he proved that, even after excluding the trees standing on the reserved area, the rest of the forest did not have sufficient number of trees which would satisfy the assurance given at the time of the auction". The subject matter of the auction sale was the totality of the trees which were marked for cutting in the two coupes. Since a substantial number of the marked trees was contained in the area which was subsequently declared as "reserved", it is inevitable that there was a corresponding diminution in the total quantity of timber which was announced as available for cutting at the time of the auction sale. 11. We do not, therefore, find it possible to agree with the reasons stated by the High Court for refusing the plaintiffs prayer for refund of the amount paid by him by way of the first installment of the sale price . The conclusion recorded by the trial court on this issue was perfectly correct and the High Court was in error in interfering with the said finding. 12. We notice, however, that a slight mistake has crept into the judgment and decree of the trial court, inasmuch as the amount of the first installment refund has been wrongly mentioned therein as Rs. 17, 500, whereas the amount actually paid by the plaintiff by way of the first installment was only Rs. l7, 250. A modification to this extent is, therefore, called for in the decree passed by the trial court. 13.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]Admittedly, the auction sale was of the right to cut the trees which had been marked and numbered in the entire area covered by the two coupes in question. Details regarding the quantity and quality of timber available for cutting in the respective coupes were announced by the concerned Range officers at the time of auction and it was on the basis of the said information that the participants in the auction were invited to bid. The trial Court as well as the High Court have concurrently found that an assurance had been given by the Department at the time of the auction that the two coupes contained the specified quantity of timber of different varieties and girth and that the details then given were as set out in the tabular statement appended to paragraph 3 of the written statement of the defendant. The plaintiff (examined as P.W. 2) and P.Ws. 3 to 6 all of whom had inspected the coupes subsequent to the auction sale have sworn that the quantity of the timber that was actually available for cutting in the two coupes was considerably less than the quantity announced at the time of the auction. The oral testimony given by them is corroborated by the statements contained in Exhibits p 1,6 and, which are copies of the various representations made by the plaintiff to the offices of the Forest Department after he found out on inspection of the coupes that there was vast divergence between what was announced at the time of the auction as the quantity of the timber available for cutting from the two coupes in question and the quantity that was actually found to be available. Even though the thenl Forest officer, who was examined as D.W. 2, has stated in the evidence that after receipt of the plaintiffs complaint, he inspected the coupes and submitted a detailed inspection report to the Divisional Forest officer, the defendant did not produce the said report in Court, it has also come out in the evidence of D.W. 3, who was the Forest Guard in the area concerned at the relevant time, that he had submitted to the Range officer a report containing details of the timber available for cutting in the two coupes. The aforementioned two reports would have been of valuable assistance in determining the extent of shortfall, if any, in the quantity of timber actually available for cutting in t he coupes when compared with the particulars given out at the auction. Then of the two reports by the dependant, who alone was in possession of the documentary evidence capable of throwing light on ther of this crucial issue, assumes significance in view of the admission made by D.W. 3 that during his inspection of the coupes pursuant to the complaint received from the plaintiff he had found that there were some trees which had been numbered for cutting but had not been hammer marked, that there were some other trees which contained hammer marks only at one place instead of at the base as well as at breast height, as required under the rules, and that there were still some other trees which ha d been marked by hammer but had not been assigned any number. The inspection report prepared by this witness which has been suppressed is a very material document since the witness has sworn that he had actually counted and noted the precise number of trees in respect of which such irregularitieswere found to have beencommitted. Another important admission made by this witness is that there was some truth in the complaint of the plaintiff with respect to the reservation of thee evidence clearly shows that there was a large number of trees of different varieties situated on the bank of a Nalla in Coupe No. 2 "B" and they had been hammer marked and serially numbered for cutting and removal. At the time of the auction sale, the Department had treated these trees as being available for extraction by the contractor and it was on that basis that the particulars regarding the total quantity of timber belonging to different species available for cutting in t he two coupes were announced to the bidders. However, subsequently, the area comprising the bank of the said Nalla was declared as "reserved", with the result that there was a prohibition against cutting of the trees from the said reserved area. The plaintiff in his evidence, as P.W.2, has stated that there were about 300 teak trees in the area forming the bank of the Nalla and that the value of those trees would amount to between Rs. 10, 000 and Rs. 12, 000. Though three officers of the Forest Department were examined on the side of the defendant, the aforesaid testimony given by the plaintiff has not been controverted by them,Notwithstanding the aforesaid facts brought out in the A evidence, the High Court summarily rejected the plaintiffs contention based on the factum of reservation of the trees standing on the bank of Nalla by stating as follows:"But there is nothing in the plaintiffs complaints to the Department at any stage alleging that this reservation had been made after the auction had taken place. The idea appears to be an. The mere oral statement of the plaintiff and his witnesses that this marking for reservation ha d taken place after the auction, on the basis that they did not see these markings about reservation of the trees near the Nalla when they had gone to that forest on earlier occasions, are wholly insufficient to come to the conclusion that the Nalla area had been reserved after thee aforesaid reasoning is based entirely on the assumption that in one of the complaints preferred by the plaintiff before the Department officers, it had been alleged by h im, that the reservation of the trees on the bank of Nalla had been made after the auction had taken place. A mere reference to Exh.l is sufficient to show that the aforesaid assumption made by the High Court is wholly erroneous. Exh.l is a copy of the representation dated December 28, 1960 submitted by the plaintiff to the Divisional Forest officer (East), Bhopal. In paragraph 4 thereof, the plaintiff had stated as follows:"That the applicant inspected the coupe in or about the first week of November 1960 to give the coupe boundary certificate as is required under Clause 2 of the draft agreement deed. During this inspection the applicant was surprised to know that there were numerous irregularities committed in the marking of trees and huge area containing the Forest Produce marked for sale in the said coupe was subsequently reserved." (underlining supplied), the correct factual position is that the plaintiff had categorically complained to the Department that a substantial area containing the forest produce, which had all been originally marked for sale, had been subsequently reserved, with the result that the quantity of timber available for extraction had become substantially reduced, The criticism made by the High Court that the argument advanced by the plaintiff was the result of an, was therefore not justifiedWe may at this stage refer to Condition No. 3 in the sale notice (Exn. D/l) on which strong reliance was placed on behalf of the respondent. That condition reads:"The details of quantities of forest produce announced at the time of auction are correct to the best of the knowledge of the Divisional Forest officer but are not guaranteed to any extent The intending bidders are, therefore, advised to inspect on the spot the contract area and the produce they intend to bid for with a view to satisfy themselves about its correctness. No claim shall lie against the State Government for compensation or any other relief, if the details of the quantities are subsequently found to ben our opinion, the trial court was perfectly right in its view that, while the said condition will operate to prevent the Contractor from claiming any damages or compensation from the State Government on the ground that the details of the quantity of the forest produce were subsequently found to be incorrect, it will not preclude him from repudiating the contract on its being found that there was substantial variance between the particulars furnished at the time of the auction regarding the quantity and quality of timber that will be available for extraction in the concerned coupes and the quantity etc. Of tree growth actually found to be available on the site. It has been clearly established by the evidence in this case that a very substantial quantity of timber standing on the bank of Nalla had been marked for extraction and numbered and the auction sale had been held on the basis that the highest bid der would be entitled to fell and remove all those trees. But by the time the coupes were allowed to be inspected by the auctionpurchaser, that area was declared to be "reserved", with the result that there was a complete prohibition against th e felling of any timber therefrom. This has substantially altered the very foundation of the contract and hence it was perfectly open to the plaintiff to repudiate the contract and claim a refund of the amount deposited by him as a part payment of the purchase priceWe are unable to agree with the view expressed by the High A Court that "the plaintiff cannot succeed unless he proved that, even after excluding the trees standing on the reserved area, the rest of the forest did not have sufficient number of trees which would satisfy the assurance given at the time of the auction". The subject matter of the auction sale was the totality of the trees which were marked for cutting in the two coupes. Since a substantial number of the marked trees was contained in the area which was subsequently declared as "reserved", it is inevitable that there was a corresponding diminution in the total quantity of timber which was announced as available for cutting at the time of the auctione do not, therefore, find it possible to agree with the reasons stated by the High Court for refusing the plaintiffs prayer for refund of the amount paid by him by way of the first installment of the sale price . The conclusion recorded by the trial court on this issue was perfectly correct and the High Court was in error in interfering with the said findingWe notice, however, that a slight mistake has crept into the judgment and decree of the trial court, inasmuch as the amount of the first installment refund has been wrongly mentioned therein as Rs. 17, 500, whereas the amount actually paid by the plaintiff by way of the first installment was only Rs. l7, 250. A modification to this extent is, therefore, called for in the decree passed by the trial court.