The Attorney-General v. Vithilingam.
1941Present: Keuneman and Wijeyewardene JJ.
THE ATTORNEY-GENERAL v. VITHILINGAM.
105—D. C. Mullaittivu, 648.
Contract—Tender for the right to exploit forest reserve—Acceptance of offer—Failure of tenderer to carry out agreement—Grant of contract to nexthighest tender—Claim by Crown for damages.
By Gezette Notification the Conservator of Forests called for tendersfor the right to exploit a certain forest reserve.
The defendant’s tender, being the highest, was accepted but thedefendant failed to implement the terms of the agreement. TheConservator of Forests thereupon accepted the bid of the secojfed highesttenderer after an attempt to get him to increase his offer.
Held, that the Crown was entitled to recover from the defendant thedifference between the amounts of the two tenders as damages.
^ PPEAL from a judgment of the District Judge of Mullaittivu.
E. Chitty, C.C., for plaintiff-appellant.
No appearance for defendant-respondent.
Cut. adv. vult.
' 41 N. L. /?. 369.
118KEUNEMAN J.—The Attorney-General v. Vithilingam.
September 25, 1941. Keuneman J.—
In this ease the main facts are not in dispute. By Gazette Notificationdated October 14, 1938 (P 1), the Conservator of Forests called for tendersfor the right to exploit, inter alia, the “ Puvarasankulam Reserve Coupe4 ”. Under the Notification the successful tenderer had, within 10 daysof being informed in writing of the acceptance of his tender, to pay in fullthe amount of his offer and enter into the necessary agreement. Ifhe failed to do this, his tender form deposit of Rs. 50 may be forfeited bythe Crown, and he may render himself liable to make good any resultantloss.
The defendant-respondent made his tender on December 3, 1938 (P 2),and this was accepted on December 21, 1938 (P 3). He was asked to enterinto the necessary agreement on or before January 4, 1939, but failed tocomply with this request. He asked for time and made several excusesfrom time to time. Eventually on April 10, 1939, he stated that he hadgrown sickly and was not in a position to work the area in question withinthe prescribed time (P 13). After some further, correspondence, theConservator of Forests with the prior sanction of the Tender Boardaccepted the bid of the second highest tenderer on May 26, 1939 (P 18).Prior to that an attempt was made to get the. second highest tenderer,to increase his offer (see P 16 of May 9, 1939), but without avail.
Thereafter, the Attorney-General brought action against the defendant,claiming as damages the difference between the amounts of the two tenders.
It is not contested that there has been a breach of contract, but it wasargued that the plaintiff is not entitled to the amount claimed. Thelearned District Judge has held in substance that the damages claimedwere not in the contemplation on the parties, and that no material hasbeen placed before him on which damages can be assessed. He hasaccordingly dismissed the plaintiff’s action with costs.
I do not follow this argument. I think it is clear that it must havebeen in the contemplation of the parties, that if the defendant defaulted,the right to exploit this forest would have to be given to some otherofferor, and in fact it was the duty of the Conservator of Forests to seekto minimize the damages, by giving this right to some such person. Thereal point which might have been argued is that the price tendered by thesecond offeror was not the best price which could have been obtainedoutside at the time of the breach. It was perhaps open to the Conservatorto readvertise the right of exploitation, and to accept the righest offer.But it has to be remembered that this is a very specialized form of con-tract, and that the number of offerors must of necessity be limited, andI do not think it can be said that the Conservator failed to act bona fideand reasonably in regarding the persons who actually made offers as theonly potential offerors. Only a short period of time had elapsed betweenthe cfate of the breach and the acceptance of the tender of the secondofferer. As we have seen an attempt was made to get this man toincrease his offer, but that was not successful. I think we must regardthis as the best tender available at the time of the breach, and regard theacceptance by the Conservator of this tender, as a bona fide transaction^In this connection I have not forgotten the disparity between the twotenders.
HOWARD C.J.—Siriwardene v. Sinnetamby.
In the circunlstances, I am of opinion that the plaintiff is entitled toclaim the difference between the two tenders. The deposit of Rs. 50,which has been spoken to by the witnesses may be applied as against theamount due under the decree. I am not disposed to allow any intereston the amount decreed.
I allow the appeal and enter judgment ordering the defendant to paythe plaintiff the sum of Rs. 753 and costs in both Courts.
Wijeyewardene J.—I agree.
THE ATTORNEY – GENERAL v. VITHILINGAM