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2008 Supreme(AP) 715
2008 (6) ALD 103
IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD
C.V. NAGARJUNA REDDY, J.
Alluri Narayana Murthy Raju - Appellant
Versus
District Collector, Visakhapatnam District, Visakhapatnam and others - Respondents
WP No.1040 of 2003
Decided on: 2 September, 2008
(Mrs.) M. Bhaskara Lakshmi, Counsel for the Petitioner; Government Pleader for Panchayat Raj, Counsel for the Respondents.
Headnote:A) Contract Act 1872 Section 56:- Petitioner highest bidder in auction of sand quarrying conducted by the authorities- Stiff resistance by the villagers prevented the lifting of the sand during the original as well as extended period of license- Police protection, institution of criminal cases or issue of mandatory injunction of civil courts failed to enforce the quarrying by the petitioner- Writ petition filed by the bidder for declaration that the inaction of the respondent as illegal and refund of the earnest money- Held both the parties are governed by Section 56 which contains doctrine of frustration- Petitioner entitled to refund of the earnest money under doctrine of frustration, but he is not entitled to interest on the amount in the absence of any pleading or evidence attributing the impossibility to perform the contract on the respondent and also non-fixation of liability prior to filing of the writ petition
B) Interest Ad 1978 - Section 3 (1):- Payment of interest prior to the date of the institution of the writ proceedings in favour of the petitioner due to frustration of the contract does not arise since the non-executability of the contract was for events subsequent which were beyond the contemplation or control of the parties to the suit and the frustration of the contract and liability ofr payment of the earnest money had not fastened prior to the institution of the proceedings under writ petition
This writ petition is filed for a writ of mandamus to declare the inaction on the part of the respondents in enabling the petitioner to lift sand during the lease period from 28.4.2000 to 27.4.2001 and also during the extended lease period from 28.4.2001 to 27.4.2002, as illegal. The petitioner sought for a consequential direction to respondent No.2 to refund the bid amount of Rs.8,35,000/- together with interest.
2. The facts of the case are stated as under:
In pursuance of the notification issued by respondent No.2 on 23.12.2000 calling for tenders for auctioning the right to quarry the sand in Gostani River in Maddi Gram Panchayat, Padmanabham Mandal, Visakhapatnam District, the petitioner made his application by paying necessary E.M.D. Respondent No.2 conducted auction on 10.4.2000 and the petitioner emerged as the highest bidder. The contract was awarded to the petitioner for Rs.8,35,000/- per year under proceedings dated 22.4.2000. The period of contract was of two years commencing from 28.4.2000 to 27.4.2001 and 28.4.2001 to 27.4.2002. The petitioner's woes started with the award of contract as the residents of Maddi Village prevented him from carrying on quarry operations on the ground that it will lead to depletion of the ground water affecting the irrigation channels. Consequently, the petitioner approached respondent No.2 with a request to extend the lease period by one more year without having to pay further lease amount. The representation having been forwarded by respondent No.2 to the District Level Sand Auction Committee, the said Committee in its meeting held on 31.5.2001 extended the lease period from 29.4.2001 to 28.4.2002. Respondent No.2 issued formal proceedings dated 10.6.2001 to this effect.
3. As the resistance of the villagers against lifting of sand by the petitioner continued even during the extended lease period, the petitioner approached respondent No.2, who in turn referred the matter to the Irrigation and Ground Water Departments to examine the grievance of the villagers and send a report. After due verification, they sent a report to respondent No.1, where in it was mentioned that there was no harm to the irrigation structures and also to the ground water level, if sand is quarried.
4. On receipt of the said report, respondent No.1 vide his letter dated 10.12.2001 requested the Superintendent of Police, Visakhapatnam, to provide necessary police aid to the petitioner to quarry the sand and when the petitioner started sand quarrying, he again faced stiff resistance from the villagers forcing him to file complaint to the police, who registered the same as Crime No.68 of 2001 of Padmanabham Police Station. On information given by the Inspector of Police, Bheemunipatnam, respondent No.5 initiated proceedings dated 24.12.2001 under Section 144 Cr.P.C. Despite the said measures, the villagers did not permit the petitioner to lift the sand. He then filed as No.192 of 2000 for permanent, injunction against the villagers of Maddi. Village and the Civil Court granted ad-interim injunction in LA. No.870 of 2000. Despite the said injunction order, the petitioner was not permitted to quarry the sand.
5. The petitioner through his representation dated 6.2.2002 requested respondent No.2 either to issue necessary direction for providing police aid or in the alternative to extend the lease period, for another year from 28.4.2002. As there is no response to the said representation, the petitioner filed WP No.3640 of 2002 in this Court. While disposing of the said writ petition at the admission stage, this Court directed respondent Nos.2 and 6 to consider and dispose of representations dated 25.1.2002 and 6.2.2002 of the petitioner. In compliance with the said direction of this Court, respondent No.6 instructed Inspector of Police, Bheemunipatnam, on 22.3.2002 to provide sufficient police protection for the next ten days to enable the petitioner to lift the sand. The petitioner specifically averred in his affi
