JUDGMENT

A. Lekshmikutty, J.

1. The plaintiffs in O.S. No. 151/1992 on the file of the Sub Court, Muvattupuzha is the appellant herein. Originally, the defendant was Koothattukulam Panchayat. At the time of filing the Original Suit, the Panchayat was converted as Koothattukulam Municipality. During the pendency of the suit, it was again converted as Koothattukulam Panchayat. The suit is for recovery of Rs.29,450/- with interest from the defendant. On 28.3.1989, the respondent herein issued an auction notice for auctioning the right to occupy the rooms constructed by the Panchayat in the market plot. The 2nd plaintiff was the highest bidder for room No. V in Block No. A conducted on 12.4.1989. As per the terms of contract, the 2nd plaintiff remitted Rs.20,000/- as deposit and obtained receipt for the same. At the time of participating the auction proceedings, the respondent convinced the 2nd plaintiff and other participants that within one month from the date of auction, the construction of the room will be completed. The auction was for the period ending with 31.3.1990. Due to the misappropriation of money and neglect of the respondent the construction of the room was not completed as covenanted in the contract. The plaintiff was expected to pay rent from the date when the room was put in possession to the appellant. Since the construction of the room was not completed due to the neglect of the defendant, the defendant could not give possession to the plaintiff. After the auction, the plaintiff on many occasions requested for possession of the room. As the building was not completed, the plaintiff sustained heavy loss, since the business could not be started in time due to the negligent attitude of the defendant. On 5.9.1989, the 2nd plaintiff issued a notice to the defendant demanding the deposit amount and damages with interest. But the defendant neither sent any reply nor take any steps to comply the covenants of the auction proceedings. By that time the Panchayat was converted into Municipality. On 14.1.1992 a notice was issued to the Municipality demanding the amount with interest. The Municipality issued a reply stating that the matter was under consideration of the council and decision was awaited on the matter. Even thereafter no step was taken by the Municipality. In the meantime, the 2nd plaintiff was compelled to shift her residence to Palakkad. Therefore, the right to occupy the room was handed over to the first appellant with the consent of the defendant. The irresponsible attitude of the respondent in settling the dispute resulted in the Original Suit.

2. On 4.3.1993, the Municipality filed a written statement contending that the period of the agreement was extended. Neither the Panchayat nor the Municipality violated any terms in the agreement. The Municipality denied the notice issued by the 2nd plaintiff on 5.9.1989. The Municipality expressed their willingness to return the deposit amount except the rent for six months. But subsequently the Municipality was again converted as Panchayat and hence the present defendant is substituted. The defendant thereby filed another written statement contending that the suit is barred by law and limitation. The suit is not filed within six months from the date of cause of action. So the suit is liable to be dismissed.

3. On the basis of the pleadings, the court below raised five issues. On the side of the plaintiffs, PWs.1 to 3 were examined and Exts.Al to A4 marked. On the side of defendants, Exts.B 1 to B3 were marked. No oral evidence was adduced. The court below after considering the evidence dismissed the suit. Against the said judgment and decree, this appeal is filed by the plaintiffs.

4. Ext.A1 is the auction notice for the newly constructed market stalls of Koothattukulam Panchayat. It is admitted case of the parties that the plaintiff was the highest bidder in respect of room No.V in Block No.A of the building and in pursuance of the bid, the 2nd plaintiff has deposited Rs.20,000/- evidenced by Ext.A2. As per the plaintiffs, at the time of auction, the defendant agreed the 2nd plaintiff and other participants in the auction that construction of the room will be completed within one month from the date of auction. The auction was for the period ending on 31.3.1990 and auction was on 12.4.1989. The specific case of the 2nd plaintiff is that since the defendant has not completed the construction and handed over possession of the room, she could not start her business in time. So she sent a notice on 5.9.1989 to the defendant demanding the deposit amount with damages and interest. But according to the defendant, no such notice was received by them. But the defendant admits Ext.A4 notice dated 14.1.1992 sent on behalf of the plaintiff to the Municipal Commissioner, Koothattukulam. At the time of auction, the defendant was Koothattukulam Panchayat. Subsequently it was converted into Municipality. At the time of institution of suit it was Municipality. It was again converted as Panchayat and the Municipality was substituted by the Panchayat. Now the only contention of the defendant is that the suit is barred by law and limitation. As per Section 123(2) of the Kerala Panchayat Act, the legal proceedings shall be caused within six months after the day on which the cause of action arose or in case of the continuing injury or damage during such continuance or within six months after the ceasing thereof. No notice under Section 123(2) of the Kerala Panchayat Act was served on the defendant. The said provisions are similar in all respects to Municipalities Act also. As per 8.392(3) of the Kerala Municipalities Act, the plaintiffs must file the suit within six months from the date of the cause of action. 8.392(3) of the Kerala Municipalities Act or Section 123(2) of the Kerala Panchayat Act is not applicable in the present case since no agreement was executed by the plaintiffs in favour of the defendant in accordance with the Kerala Panchayat Contract Rules and Regulations. So far as there is no concluded contract, Section 123(2) of the Kerala Panchayat Act is not applicable. Even if any notice is necessary, Ext.A4 notice is issued to the defendant when it was a Municipality and the suit is filed on 10.4.1992 which is within six months from the date when cause of action arose. The allegation that at the time of auction, the construction was not completed is not denied by the defendant. There is no evidence to show that the defendant completed the construction as agreed, within one month and the defendant was willing to hand over possession to the plaintiff. At the time of auction, the building was in Koothattukulam Panchayat which was subsequently converted as Municipality. Subsequently it was again converted into a Panchayat.

5. The suit is filed for recovery of money deposited by the plaintiffs at the time of auction conducted by the defendant in respect, of Room No.5 in Block A building belongs to the defendant. The defendant has no case that an agreement was executed by the plaintiff in favour of the defendant and possession of the room was handed over to him. In the written statement filed by the Municipality, notice alleged to be sent on 5.9.1989 is denied. The plaintiffs have not adduced any evidence to prove that such notice was issued to the defendant. But both parties admit the issuance of notice on 5.2.1992. Admittedly, the suit is filed within six months from the date of Ext.A4 notice. So the contention of the defendant that the suit is barred by law and limitation cannot be accepted.

In such circumstances, the defendant is liable to pay the amount received by it at the time of auction of shop room No. V in Block A. For the reasons stated above, I am constrained to set aside the judgment and decree passed by the court below.

The plaintiffs are entitled to recover an amount of Rs. 29,450/- with 12% interest from the date of suit till date of recovery. The Appeal is allowed.