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1993 Supreme(Ker) 498

High Court of Kerala
K. Narayana Kurup, J.
K P Latheef - Appellant
Versus
The Superintending Engineer & Ors - Respondent
O.P. No. 85 of 1988
Decided On : 17-02-1993

The demand notice entailing civil consequences should be passed strictly in accordance with the principles of natural justice and fair play, and adjudication of liability should be by an independent authority.

Headnote:

demand notice - breach of contract - Land Acquisition Act - Indian Rare Earths, Chavara - Art.14 of the Constitution of India - Sushila Devi v. Hari Singh AIR 1971 SC 1756 - Govindbhai v. Gulam Abbas AIR 1977 SC 1010 - State of Karnataka v. Shree Rameshwara Rice Mills AIR 1987 SC 1359 - Central Inland Water Transport Corporation Ltd. v. Broja Nath AIR 1986 SC 1571 - Hyderabad Municipal Corporation v. Krishna Swamy AIR 1987 SC 1359

Fact of the Case:

The petitioner was awarded a contract for road work, but faced obstruction from landowners due to pending compensation under the Land Acquisition Act. The government issued a demand notice for damages suffered due to re-arrangement of the work.

Finding of the Court:

The court found that the petitioner was prevented from executing the work due to the government's failure to hand over the site in time and clear obstructions. The court held that the demand notice was illegal, arbitrary, and issued without jurisdiction, violating Art.14 of the Constitution of India.

Issues: Breach of contract, demand notice legality, jurisdiction, and violation of Art.14 of the Constitution of India.

Ratio Decidendi: The performance of the contract became impossible due to unexpected events, and the demand notice was issued without proper adjudication, violating principles of natural justice and fair play.

Final Decision: The demand notice was quashed, and the original petition was allowed.

JUDGMENT

1. This original petition is filed to quash Ext. P-6 demand notice issued by the second respondent for realisation of a sum of Rs.5,27,509 due as damages alleged to have been suffered by the Government on re-arrangement of work which was originally awarded to the petitioner by Ext. P-1 letter. The work in question relates to widening, improving and laying the approach road from N-H. 47 to Indian Rare Earths, Chavara.

2. First respondent invited tenders for the above work in June, 1978. The petitioner being the lowest bidder, the work was awarded to him by Ext. P-1 letter dated 4th January 1979 of the first respondent, and pursuant to Ext. P-1, the necessary agreement was executed by the petitioner on 20th July 1979. Under the terms of the agreement, the work has to be executed from the property acquired for the said purpose by the Government. The petitioner started the work immediately after the execution of agreement and according to the petitioner, when he started the work, the owners of the property whose lands were acquired on both sides caused obstruction as they did not allow the construction to proceed until compensation under the Land Acquisition Act is paid to them. The owners had made representations to Government claiming compensation, copy of one such representation (dated nil) is Ext, P-2 and a copy of which was served on the petitioner also. On receipt of Ext. P-2, the petitioner also made a representation Ext. P-4 (a) dated 30th July 1980 to Government. In Ext. P-4 (a) the petitioner, detailed the circumstances which resulted in the petitioner being not able to carry out the work because of the obstruction caused, by the owners whose property has been acquired and submitted to the Government that he will not be able to execute the work until compensation in full is paid to the owners of land and requested the Government to relieve him from the contractual obligations and to pay him the damages he has already suffered. The Government has not so far passed any order on Ext. P-4 (a), gays the petitioner. Shortly, after Ext. P-4(a), the first respondent served Ext. P-3 notice dated 20th August 1980 on the petitioner stating that the petitioner has not started work so far and if he does not complete the work within 10 days, the work will be terminated and got done by other agency at the petitioner's risk and cost. To Ext. P-3 the petitioner sent Ext. P-4 reply dated 8th September 1980 stating that the delay was caused solely on account of the lapses on the part of the Department in not handing over the site and clearing the site by cutting of trees, removal of telephone and electric posts, pillars, slab's, demolition of buildings on the acquired land, etc. The petitioner submits that he has not received any reply to Ext. P-4 or Ext. P-4(a) so far.

3. But, to the petitioner's utter consternation he received . a demand notice Ext. P-6 dated 10th December 1987 issued by the second respondent Tahsildar asking the petitioner to remit a sum of Rs. 5,27,509 being the loss suffered by the Government for re-arranging the work awarded to the petitioner as per Ext. P-1 letter. On receiving Ext. P-6 the petitioner made enquiries whether the Government have passed any orders on Exts. P-4 and P-4 fa) or any order terminating his work was passed by the Government. On. such enquiry, the petitioner came to know that the Government took possession of the acquired properties only in 1984 (i.e. 5 years after the award of the work) and the petitioner was able to obtain a copy of the intimation issued by the Land Acquisition Officer to the Assistant Executive Engineer (who is connected with the work) requiring the latter to be present on 30th August 1984 to take possession of the land acquired for the purpose of widening the road. Ext. P-5 is the copy of the letter addressed from the .Land Acquisition Officer to the Assistant Executive Engineer (B & R), Chavara. Ext. P-5 shows the details of the property directed to be taken posse













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