Ramaprasada Rao, J.- ‘The Madurai Municipality farmed out its right to collect fees in connection with the weekly shandies and annual cattle fair held within its jurisdiction for the year 1962-63. The auction was held on 6th March, 1962 and the Council of the Madurai Municipality accepted the defendant’s bid of Rs. 70,000 as it was the highest, by its. resolution, dated 16th March, 1962. Admittedly the defendant was put in. possession of the market from 1st April, 1962. The defendant executed the agreement Exhibit A-1 on 7th April, 1962. The period during which the defendant: could remain in the market for purposes of collecting the fees therefrom is admittedly one year commencing from 1st April,. 1962 and ending with 31st March, 1963. For purposes of this case one or two salient clauses of the contract may be referred to. In particular, if the contractor fails to perform or observe any of the covenants in the said agreement it shall be lawful: tor the Municipal Council in addition. to and without prejudice to its other rights and remedies, by notice in writing, to determine the agreement or the contract, and on such determination the licence granted to the defendant shall cease. It is also provided that it is open. to the Executive Authority of the Municipality or the Council of its own volition, on such cancellation, to re-sell or manage the market departmentally at the risk and cost of the licensee and the licensee (defendant) shall be liable to compensate all losses and damages arising there from as per Municipal accounts. It is the common case that the defendant in violation of the terms of Exhibit A-1 collected, a fee far in excess of the schedule of rates prescribed by the plaintiff and this gave a cause of action to the plaintiff to determine the licence and cancel the contract. Accordingly, the Commissioner, by his proceedings, dated 25th April, 1962, cancelled the contract with effect from 26th April, 1962 and gave notice to the defendant that the caution deposit of Rs. 500 was being forfeited. Subsequently the action of the Commissioner was approved by the Council in its resolution, dated 3rd May, 1962. An appeal, by the defendant as provided for against. such cancellation to the Council of the Madurai Municipality was unsuccessful. Thereafter the defendant did not question the right of the Counsc1 to so cancel the contract as above. An attempt was made by the Madurai Municipality tore re-auction the right to collect fees in the same market by conducting an auction on 16th May, 1962, but this proved abortive in the sense that the defendant caused a Writ petition to be filed in this Court and thwarted the subsequent auction-pur-chaser from effectively conducting the weekly shandy and annual cattle fair. The fact, however, remains that notwithstanding the so called re-auction on 16th May, 1962, the auction purchaser, one Karuppanna Thevar, did not run the market which was run departmentally by the Municipality itself. In those circumstances the Municipality had to run the market till the period of the contract was over, and at the end of the contract period the damages were reckoned as per the Municipal accounts in the following manner;

Particulars of Claim Rs.

Lease amount due from the defendant .. 70,000.00

Less:

1. Amount remitted by the defendant as

per M.R. No. 36653/3-362 .. 1,000.00

Do. as per M.R. No. 36655/3-3-62 .. 1,000.00

Do. as per M.R. No. 40607/28-3-62 .. 16,003.00

2. Amount collected departmentally .. 33,640.52

Less: 10% deparmental collection charges (&151;) .. 3,564.05

Balance .. -----------

32,073.05

-----------

Net total of items 1 and 2 .. 50,079.47

Less: Caution Deposit forfeited (&151;) .. 500.00

.. -----------

49,579.47

Balance .. 20,420.53

Interest for the same from 1-4-63 to

10-6-65 form 2 months and 10 days

at 12% per annum .. 5,377.53

Total .. -----------

25,798.06

-----------

The Municipality after appraising the defendant of such damages sustained by it as a result of the wrong committed by the

Click Here to Read the rest of this document