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2017 Supreme(Mad) 208

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
A. SELVAM, P. KALAIYARASAN, JJ.
IMC Ltd. - Appellant
Versus
Tuticorin Port Trust through its Chairman - Respondent
Appeal Suit(MD) No. 215 of 2008
Decided On : 06-02-2017

Advocates Appeared:
For the Appellant : Mr. P.S. Raman, Mr. V.P. Raman
For the Respondent: Mr. G.R. Swaminathan, Mr. S. Yashwanth

Headnote:

Registration Act - Section 17 - Transfer of Property Act - Section 53(A), 56 - Indian Contract Act, 1872, - Section 65 - Suit for recovery of money - Relief of specific performance - plaintiffs are carrying on business in handling liquid cargo by providing storage facilities in various Ports throughout India - In response to the tender notice of defendant Port Trust as to the allotment of land on lease basis for creation of facilities like Warehouses, Tank Farms, Marine Workshop etc. Plaintiff submitted the tender for Tank Farms for storage and handling of Non-Hazardous cargo and Hazardous cargo of B & C clause commodities - Defendant allotted 8.9 acres of land in Hare Island, the Port Trust area to the plaintiff to the plaintiff – Held, defendant took all effective steps to get reclassification into CRZ-II from CRZ-I and the same could not be achieved. Section 65 of the Indian Contract Act also provides that party to the contract is liable to return the benefit derived under a contract which becomes impossible of performance. Therefore, as per the doctrine of frustration of contract under Section 56 of the Indian Contract Act, 1872, the plaintiff is entitled to be refunded the amount paid by him with reasonable interest - Facts and circumstances of the case, the date of deposit and length of period, this Court is of the view that awarding 6% interest will be just and reasonable. For the above said reasons, this appeal is liable to be allowed - Appeal is allowed

JUDGMENT :

P. Kalaiyarasan, J.

This appeal suit is directed against the judgment and decree of the Additional District Judge/F.T.C. No.II, Tuticorin dated 08.01.200 in O.S.No.13 of 2006, dismissing the suit for recovery of sum of Rs.1,30,86,731/- with interest or for an alternative relief of specific performance.

2. The plaint averments are as follows:-

2.1. The plaintiffs are carrying on business in handling liquid cargo by providing storage facilities in various Ports throughout India. In response to the tender notice dated 13.02.1998 of the defendant Port Trust as to the allotment of land on lease basis for creation of facilities like Warehouses, Tank Farms, Marine Workshop etc. the plaintiff submitted the tender for Tank Farms for storage and handling of Non-Hazardous cargo and Hazardous cargo of B & C clause commodities. The defendant allotted 8.9 acres of land in Hare Island, the Port Trust area to the plaintiff on 20.05.2000 to the plaintiff. The plaintiff has also paid Rs.98,17,200/- by demand draft on 29.11.2000 towards advance lease rent, premium and refundable security deposit as demanded by the defendant in its letter dated 08.11.2000.

2.2. The land leased out was falling under the Coastal Regulation Zone-I(CRZ-I) and therefore necessary clearance has to be obtained from the government agencies including the Ministry of Environment and Ministry of Surface Transport before setting up the storage facilities. As a result, the land that has been allotted to the plaintiff has not been physically handed over till date and the plaintiff has not commenced any activity in the said land. The contract between the plaintiff and the defendant has become impossible of performance. The land allotted to the plaintiff was subject to approval by Government of India and to the environmental clearance to be given by the Union Government.

2.3. Meanwhile, the defendant demanded lease rental for subsequent years. The defendant has taken a stand that they are not responsible for getting site clearance from the government agencies contrary to their earlier assurance that they are obtaining clearance from the Government at the earliest, failing which, the defendant would allot alternate land to the plaintiff. The defendant had the benefit of amount deposited by the plaintiff. The plaintiff is entitled to claim the amount deposited by him with interest at 12% p.a. Therefore, the present suit has been filed.

3. The contentions of the written statement of the defendant are as follows:-

3.1. It is true that the plaintiff was allotted land along with 5 others for storage and handling of Non-Hazardous cargo and Hazardous cargo of B & C clause commodities, pursuant to the tender notice of the Port Trust. Since the plaintiff had not informed his acceptance within 15 days and failed to takeover the possession of land, within three months from the date of furnishing willingness, the defendant cancelled the allotment. The plaintiff repeatedly requested to confirm the allotment agreeing to the conditions as per the allotment order dated 20.05.2000. Thus, the plaintiff's request was considered and issued a demand indicating the amount by the defendant in its letter dated 08.11.2000.

3.2. As per the conditions of allotment itself, the plaintiff has to obtain all necessary clearance from the government agencies. Tender was called for only for CRZ-I area and the plaintiff duly applied for it agreeing for obtaining clearance by themselves. The plaintiff with an intention to obtain the alternate land on higher value and in the front had requested the defendant by its various letters for change of site. The plaintiff purposely had not taken the possession of land allotted and now filed the suit to evade future lease rent. The parties are governed by the contract entered into between them.

3.3. The defendant never assured contra to the agreement. The plaintiff cannot take advantage of defendant's administrative proceedings to his favour and seek relief in this suit. Cla





































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