TMI Blog1987 (2) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... a reference made in Regular Second Appeal No. 311 of 1969. The opinion of the Full Bench was sought for in the following circumstances. The respondent in C.A. No. 471 of 1975 entered into an agreement with the State of Mysore to purchase paddy on its behalf under the Paddy Procurement Scheme, 1959 and to hull the paddy and supply rice. Clause 12 of the agreement relates to breach of conditions of the agreement and the consequences that would ensue on such breach. The said clause, referring to the respondent and the State as first party and second party respectively is worded as under:- In token of the first party's willingness to abide by the above conditions, the first party has hereby deposited as security a sum of Five Hundred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate person provides that for any breach of any of the conditions of such agreement by such person he shall be liable to pay such damages as may be assessed by the State and that any amount that may become due or payable by such person to the State under any part of that agreement, shall be deemed to be and may be recovered from such person as if they were arrears of land revenue-- (i) the State is not competent to adjudicate upon the question whether such a person committed breach of contract and that the State is not competent to assess damages for any breach of the contract which is not admitted by the other side: (ii) damages so assessed cannot be recovered from such person as if they were arrears of land revenue . In accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner, even though a party to the agreement is empowered under Clause 12 to not only assess the damages occasioned by the breach of the conditions but also to adjudicate upon any issue concerning the commission of the breach itself. The learned counsel, therefore, submitted that the opinion rendered by the Full Bench and the judgments rendered in pursuance thereof are unsustainable and hence the appeals by the State should be allowed. On a consideration of the matter we find ourselves unable to accept the contentions of Mr. Iyenger. The terms of Clause 12 do not afford scope for a liberal construction being made regarding the power of the Deputy Commissioner to adjudicate upon a disputed question of breach as well as to assess the damages ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of any breach of conditions the adjudication should be by an independent person or body and not by the other party to the contract. The position will, however, be different where there is no dispute or there is consensus between the contracting parties regarding the breach of conditions. In such a case the Officer of the State, even though a party to the contract will be well within his rights in assessing the damages occasioned by the breach in view of the specific terms of Clause 12. We are, therefore, in agreement with the view of the Full Bench that the powers of the State under an agreement entered into by it with a private person providing for assessment of damages for breach of conditions and recovery of the damages will stand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... become due or payable by the first party to the second party under any part of this agreement have to be read in conjunction with the earlier portion of the clause stipulating liability on the party contracting with the State to pay damages for breach of conditions. Therefore, it follows that though damages become payable on account of breach of conditions of the agreement they nevertheless constitute amounts payable under the contract i.e. under one of the terms of the contract imposing liability to pay damages for breach of conditions. To illustrate the position if the agreement provides for a liquidated sum being paid as damages for breach of conditions instead of a sum to be assessed by the Deputy Commissioner, it cannot be said that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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