M/S. KALYANJI VITHALDAS AND SONS versus THE STATE OF M.P. AND ORS.

Citation: [1996] SUPP. 6 S.C.R. 427 · Decided: 17-09-1996 · Supreme Court of India · Bench: K. RAMASWAMY, G.B. PATTANAIK · Disposal: Dismissed

Judgment (excerpt)

MIS. KALYANJI VITHALDAS AND SONS· 
A. 
v. 
THE STATE OF M.P. AND ORS. 
SEPTEMBER 17, 1996 
[K. RAMASWAMY AND G.B. PATTANAIK, JJ.] 
B 
Agreement with Govemment for purchase of Tendu leaves in certain 
area for 3 years-One of the tenns was that the lease was renewable every 
yea~Appellant to opt for renewal within 15 days prior to the end of the 
year-Leases to be renewed within 15 days of the issue and to be accepted by C 
the Department-Appellant's offer for renewal accepted by the Govemment 
and communication sent-Appellant refused to accept the communication 
and sent telegram withdrawing from the offer-Loss to the Government on 
account of non-execution of the renewal deed and due to non-collection of 
Tendu leaves for the pe1iod since it was not sold to any other agency-Govern-
D 
ment calling upon the appellant to make good the loss-High Court dismissing 
the writ petition and holding that the appellant was liable to pay the 
damages-On appeal held, acceptance of the offer communicated to the ap-
pellant by the Govemment within time-Appellant appears to have taken 
undue advantage of some typographical e"or in the name of the appel/a:it-
company and sought to resile from the offer accepted by the Govem-
E 
ment-Having allowed the contract to lapse resulting in loss caused to the 
State due to non-execution of the contract, the resultant loss has to be 
recovered from the appellant-<Jovemment is empowered to recover the ar-
rears of the dues as land revenue from the appellant-contractor towards loss 
caused to the Govemment in not collecting the Tendu leaves under the con-
F 
tract-Land Revenue Code, S.155-Revenue Recove1y Act, 1890, Ss.3 and 
4(2). 
Shiv Saran Lal v. State of M.P. & Ors., AIR (1980) M.P. 93, referred to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 675 of G 
1980. 
From the Judgment and Order dated 24.1.79 of the Madhya Pradesh 
High Court in M.P. No. 370 of 1971. 
S.V. Deshpande for the Appellant. 
427 
H 
428 
SUPREME COURT REPORTS (1996) SUPP. 6 S.C.R. 
A 
S.K. Agnihotri. and Ashok Kr. Singh for the Respondents. 
The following Order of the Court was delivered : 
This appeal by special leave arises from the judgment of the Division 
Bench of the M.P. High Court at Jabalpur made on January 24, 1979 in 
B Miscellaneous Petition No. 370/71. 
The admitted facts are that the appellant-firm had entered into an 
agreement with the Government for purchase of Tendu leaves in Unit No. 
14, Chowki in South Division for three years ending on December 31, 1970 
C on the terms and conditions mentioned in the agreement dated November 
30, 1968. One of the terms was that the lease is renewable every year. The 
lease commences from February l of the year and- end on January 31 of 
the next year. In this case, the agreement of the appellant commenced from 
Mai'ch 2, 1968 and it was to end on January 31, 1968. As per the terms of 
the agreement, the appellant had to opt for renewal within 15 days prior 
D to December 31 and the leases were to be renewed within 15 days from 
the date of the issue and was to be accepted by the Department. The 
admitted position is that the appellant had offered for renewal on Decem-
ber 7, 1968. It is seen from the record that the Government had accepted 
the offer on January 31, 1969 and communication was sent to the appellant 
E 
on February 7, 1969; but he refused to receive the same. On February 9, 
1969, the appellant had sent a telegram withdrawing from the offer of the 
renewal. Since the appellant had refused to accept the communication, it 
was sent by the Divisional Officer on February 12, 1969 and was received 
by the appellant on February 17, 1969. Consequently, a letter was sent on 
May 20, 1979· calling upon the appellant for payment of Rs. 93,821.23 
F 
towards the loss caused by the appellant due to non-execution. of the 
renewal deed and also for non-collection of the Tendu leaves for the period 
since it was not sold to any other agency. The appellant challenged it by 
filing a writ petition in the High Court. The High Court in the impugned 
order dismissed the same holding that before the appellant had withdrawn 
G the offer, the Government had already accepted the offer of the appellant 
and, therefore, he was liable to pay the damages. 
Shri S.V. Deshpande, learned counsel for the appellant raised two-
fold contentions. Firstly, since the communication was not sent to the 
appellant before 31st January, the deadline, the appellant was entitled to 
H Withdr

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