LexSYED ISRAR MASOOD, FOREST CONTRACTOR. RET GHAT, BHOPAL versus STATE OF MADHYA PRADESH
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A s94 B c D F G H SYED ISRAR MASOOD, FOREST CONTRACTOR. RET GHAT, BHOPAL v. STATE OF MADHYA PRADESH October 1, 1981 [A;D. KOSHAL, V. BALAKRISHNA ERADI AND R,B. MISRA, JJ.J Rlghl to repudiate a contract and for refund of earnest nwney in deposit arise when variation in quantify nnd quality is found on actual count betweeii what was held out at the auction as being availab!e-Nonwproduction of the verificatiolJ ofrtport is hlt by th~ doctrine of 'suppressio veri'-Condition number 3 of the Sale Notice, value· of. Pursuant to the notice dated July 22, 1960, notifying that forest contracts will be settled by public auction, the appel!ant~plaintiff attended the said auction on August 17, 1960 after having deposi1ed the requisite earnest money of Rs. 1,000 and furnished the solvency certificate for the sum of Rs. 1.5 lakh. At the tirrie of auction, the details of the forest produce available in each coupe was announced. In the said announcement the total number of trees of each species available in each coupe as also their girth etc, were furnished and the bids were invited on the basis of the said information given to the intended bidders. The appellant was the highest bidder in respect of two coupes, namely, Searmau Coupe Cf2 "A" and "B" with a bid of Rs. 69,000 for these two coupes. Pursuant thereto, the appellant deposited on August 22, 1960, Rs. 16,250 being the balance of the first instalment of Rs. 17,250, after adjustment of the earnest money in deposit. On executing the requisite security bonds, the appellant was directed, on October 27, 1960, to proceed to the site and sign the "coupe boundary cer1ifi- cate'0, before the Range Officer for getting possession of the two coupes. When the appellant visited the two coupes and conducted a detailed ins- pection of the trees available for extraction, he found that the coupes did not con- tain the forest produce as announced at the tin1e of the auction. Inasmuch as the number of trees available for cuttiog in the two coupes were found to be very much short of the quantity and quality of the forest produce given out at the time of auction as being available in the two coupes, the appellant refused to sign the boundary certificate. The forest authorities, on January 19, 1961 served a notice calling upon the appetlant to deposit the second and third instalments of the bid amount and threatening that in the event of default, the amount would be recovered as arrears of land revenue. Subsequently a distraint notice was also issuen under section 146 of the Madhya Pradesh Land Revenue Code by the Tehsildar. On April 17, 1961, the forest authorities issued a notice calling upon the appellant to show cause why the contract be not terminated and the two • -r .,, . S,i; cMASOOh v. M.P. STATE 895 coupes re-auctioned at his risk. Thereupon the appellant, after serving on the respondent a due notice under section 80 Civil Procedure Code, filed a suit for recovery of the amount deposited by way of first instalment plus damages arising out of the breach of contract. The appellant also prayed for a permanent injunction restraining the State for taking coercive step to recover further instal· ments. The Trial Court decreed the suit as prayed for. In appeal by the rcspon· dent. State the High Court set aside the decree on the ground that the appellant did not prove that the number of trees which were actually available for extrac- tion in the two coupes, according to proper marking was less than the number of trees which was covered by 'the assurance given to the contractor at the time of the auction. • Allowing the appeal by certificate under Article 133 (I) (aj of the Constitu- tion, the Court, HELD: I. While condition number 3 in the Sale Notice (Ex. D/D) 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 predude him from repudiating [be contract on its being found that there was substantial vari- ance 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 concer- ned coupes and the quantity etc. of tree growth actually found to be available on the site. [902 D-F] 2 : 1. It has been clCarly established by the evidence in this case that a very substan
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