TMI Blog1980 (10) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... grower, planter, licensed curer, trader and consumer. Inter alia, it is entrusted with a duty of marketing coffee delivered to it by all owners of coffee estates and for that purpose it is empowered to make allotments of coffee between export and internal trade and in regard to the coffee allotment made to the latter category at the material time it adopted three methods for releasing the coffee to the trade for internal consumption : (1) by sales called pool auctions (wholesale) held at Bangalore, Coimbatore and certain other centers in Madras and Mysore States, (2) by retail sales known as local auctions and (3) by sales to cooperative societies and at propaganda centers established by it. In these appeals we are concerned with internal sales falling under the first category, namely, sales effected periodically through pool auctions . Admittedly, at such pool auctions only dealers registered with the respondent Board to whom permits are issued are entitled to participate and such pool auctions are inter alia governed by special conditions prescribed by the respondent Board generally for regulating such sales which are termed as 'Conditions of Sale' (copy produced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ief Coffee Marketing Officer had no power to accept their lower bids (in respect of 5 lots in the case of Giri Coffee Works) as those were not the highest bids for the lots concerned. Thirdly, it was contended that the Coffee Board having deliberately depressed or brought down the prices of the coffee had disentitled itself to claim damages in as much as the loss arising on such re-sale was unreal and in any event the re-sale having been held after an inordinate delay the appellants were not liable for the quantum of loss claimed. It is unnecessary to set out the other defences raised in the suits since in these appeals only the aforesaid three contentions were pressed by counsel for the appellants for our acceptance. 5. The respondent in its replications refuted the aforesaid contentions of the appellants. It was pointed out that under condition No. 8 governing the pool auctions telegraphic withdrawal or retraction of any bid was not permissible and the oral retraction had not been made to the proper officer and, therefore, there being no valid retraction the appellants' bids had been properly accepted resulting in concluded contracts. It was denied that in pool auction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in favour of the respondent that are being challenged by the appellants before us in these appeals. 7. The first contention raised by counsel for the appellants in support of the appeals was that before the results of the auction were announced a little after 2 P.M. on October 8, 1952, the appellants had retracted their bids orally as well as by a telegram and, therefore, their bids could not be accepted thereafter and no concluded contracts resulted between the appellants on the one hand and the Coffee Board on the other. In this behalf reliance was placed by counsel on two factual aspects emerging from the record. He pointed out that M.L. Gopal Setty (D.W. 1) as the Managing Director of M. Lachia Setty Sons Ltd. and as the partner of M/s. Giri Coffee Works had despatched a telegram on October 7, 1952 (Ex, B-22) addressed to the Chief Coffee Marketing Officer, Coffee Board, Coimbatore to the effect Hereby withdraw all bids given today on behalf of Giri Coffee Works and Mysore Lachia Setty Sons Limited. It was initially received by F.M. Saldhana (PW1), the Assistant Coffee Marketing Officer, in his office at about 12.30 A.M. (midnight) on October 8, 1952 and thereafter was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form prescribed by the Board and the bids in the prescribed form are required to be lodged in the closed and sealed bid boxes maintained for the purpose, and at the close of the bidding, the boxes are opened and record thereof is made by the Sale Conducting Officer under his signature which is also attested by a representative of the bidders; the bids are then tabulated and the Sale Conducting Officer selects the bids and makes the allotments to the successful bidders and a declaration containing the names of the successful bidders alongwith the lots and quantities allotted to them is put up on the notice board in the office of the Board. In reality the pool auctions resemble or are more akin to sales by inviting tenders. It is in the context of such undisputed procedure that is solemnly followed in the matter of conducting the pool auctions that Condition No. 8 will have to be considered. It runs thus : 8. Telegraphic bids or telegraphic instructions regarding bidding will not be considered. The question is whether the phrase telegraphic instructions regarding bidding occurring in the above condition is wide enough to include instructions pertaining to withdrawal or r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ids. In our view, the High Court was right in coming to the conclusion that Condition No. 8 was wide enough to bar withdrawal or retraction of bids by telegrame. 9. Turning to the oral retraction made by M.L. Gopal Setty on October 8, 1952, the High Court has taken the view that the case of oral retraction before the results were announced was not true, which may be difficult, to sustain. But, even if the evidence about such oral retraction which consists of the testimony of Gopal Setty (D.W. 1) and Saldhana (PW 1) were to be accepted at its face value, the same would be of no avail to the appellants because, such oral retraction was made to Saldhana, the Assistant Coffee Marketing Officer, who had no authority in the matter. Under the procedure it is the Sale Conducting Officer who is in charge of the pool auctions. Therefore, retractions had to be made to either the Sale Conducting Officer or the Chief Coffee Marketing Officer, the executive head of the Board, and that is why the telegram Ex. B-22 was addressed on behalf of the appellants to the Chief Coffee Marketing Officer. In this case the Chief Coffee Marketing Officer himself was the Sale Conducting Officer and the oral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfirmed it was discovered that A was insane at the time of the bidding. The Court Was moved on behalf of all the parties in the cause that B the next best bidder might be reported to be the purchaser at the sum bidden by him. To this motion B consented but the Court thought it was irregular and directed the estate to be re-sold generally. Relying on this decision counsel for the appellants contended that the normal rule was that a lower bid lapses on the receipt of a higher bid, and if the highest bid was not to be accepted for any reason, the auction must be abandoned and fresh auction would be required to be held and, therefore, in the instant case the Chief Coffee Marketing Officer could not accept the lower bids of Giri Coffee Works in respect of five lots. 11. Counsel for the respondent Board did not cavil at the aforesaid statement of law but he urged that the same was applicable to auctions generally in the absence of special conditions prescribed by the auctioneer governing the auction. According to him it was well-settled that an auctioneer can prescribe his own terms and conditions on the basis of which property is exposed to sale by auction, and in that event, the sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are used merely for the purpose of emphasising the aspect that even the highest bid need not be accepted. We are of the view that two separate powers-power to decline the highest bid and power to decline any bid-with different consequences ensuing are intended to be conferred on the seller by this condition. The addition of the word or any bid would be superfluous if the same consequence (of holding a fresh auction) was to ensue in the event the highest bid being declined. Therefore, on construction of the condition it is clear that by necessary implication power had been conferred on Board or its Chief Coffee Marketing Officer to accept a lower bid in preference to any higher bid. Besides, at Ex. A-275 the respondent Board has produced a tabulated statement showing a number of instances where the highest bids were rejected and lower bids accepted at pool auctions conducted by it from 1949 to 1952-a period long before the instant dispute arose which clearly shows that the parties to the pool auctions also understood Condition No. 6 as conferring a power on the Board or its Chief Coffee Marketing Officer to accept lower bids in preference to higher bids. Moreover, such construc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd (4th Edn.) Vol. 12, para 1193 at page 477 which runs thus : 1193. Plaintiff's duty to mitigate loss. The plaintiff must take all reasonable steps to mitigate the loss which he has sustained consequent upon the defendant's wrong, and, if he fails to do so, he cannot claim damages for any such loss which he ought reasonably to have avoided. Again, in para 1194 at page 478 the following statement occurs under the heading 'Standard of conduct required of the 'plaintiff' : The plaintiff is only required to act reasonably, and whether he has done so is a question of fact in the circumstances of each particular case, and not a question of law. He must act not only in his own interests but also in the interests of the defendant and keep down the damages, so far as it is reasonable and proper, by acting reasonably in the matter.... In cases of breach of contract the plaintiff is under no obligation to do anything other than in the ordinary course of business, and where he has been placed in a position of embarrassment the measures which he may be driven to adopt in order to extricate himself ought not to be weighed in nice scales at the instance of the defend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting party. 15. Here the material on record clearly shows that internal coffee prices in the year 1952, particularly from March to October 1952, had soared very high on account of malpractices indulged in by coffee dealers and even the Government of India felt itself very much concerned about it and suggestions had been made by Government officials as well as by the Members of the Coffee Board to take steps to bring down the coffee prices at reasonable level in the interest of both the trade as well as the consumer and, in fact, several measures, including the step of accepting lower bids in preference to the higher bids, with a view to regulate coffee prices were taken by the Coffee Board pursuant to the Government's directive in that behalf. Clearly, these measures were being taken by the Board in discharge of their main function and duty to maintain the coffee prices at proper level in the interest of all concerned, particularly the consumer and were not directed against the defaulting dealers at the concerned pool auction. In fact, the evidence of Kuttalaingam Pillai (PW3), the Chief Coffee Marketing Officer, has been that before the commencement of the pool auction on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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