Supreme Court Clarifies Deputy Commissioner's Power in Adjudicating Breaches

The Supreme Court held that the Deputy Commissioner's power is restricted to determining admitted breaches, not disputed ones. It disagreed with the Full Bench's stance on recovering damages as arrears of land revenue, stating that damages under the contract should be recovered according to the agreement terms. Upholding the High Court's decisions, the Court dismissed all State appeals challenging damages assessment and recovery proceedings initiated under the Revenue Recovery Act.

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Issues involved:
The judgment addresses common questions of law arising from three cases regarding breach of contract, assessment of damages, and recovery proceedings initiated by the State under the Revenue Recovery Act.

Case 1 - C.A. No. 471 of 1975:
- The respondent entered into an agreement with the State for paddy procurement.
- Dispute arose over short delivery of rice leading to damages assessment by the State.
- Full Bench opinion stated State cannot adjudicate breach or assess damages not admitted by respondent.
- State's appeal dismissed based on Full Bench opinion.
- State contended Deputy Commissioner had authority to decide breach and assess damages.
- Supreme Court held Deputy Commissioner's power limited to admitted breaches, not disputed ones.

Case 2 - C.A. No. 3602 of 1984:
- Two contractors failed to complete building construction contracts with the State.
- Damages assessed and sought to be recovered as arrears of land revenue.
- High Court quashed recovery proceedings based on Full Bench ruling.
- State appealed against High Court judgment.

Case 3 - C.A. No. 461 of 1987:
- Similar to Case 2, contractors challenged damages assessment and recovery proceedings.
- High Court allowed writ petitions and quashed recovery proceedings.
- State appealed against High Court decision.

The Supreme Court rejected the State's argument that the Deputy Commissioner could decide breach and assess damages, emphasizing that such power is limited to undisputed breaches. Additionally, the Court disagreed with the Full Bench's view on recovering damages as arrears of land revenue, stating that damages payable under the contract can be recovered as per the terms of the agreement. As the State officers acted as arbiters in disputes, the Court upheld the High Court's decisions, dismissing all appeals.

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