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Markapur Municipality Vs. Dodda Ramireddi - Court Judgment

LegalCrystal Citation
SubjectContract
CourtAndhra Pradesh High Court
Decided On
Case NumberAppeal No. 581 of 1969
Judge
Reported inAIR1972AP299
ActsContract Act, 1872 - Sections 56; Sale of Goods Act, 1930 - Sections 6(2) and 23; Andhra Pradesh District Municipalities Act, 1965 - Sections 38
AppellantMarkapur Municipality
RespondentDodda Ramireddi
Appellant AdvocateO. Adinarayana Reddy, Adv.
Respondent AdvocateS. Hanumiah, Adv.
Excerpt:
.....amount - suit filed for recovery of balance amount - municipality had no right in collection of dung - pigs did not belong to it - pig owners have right to collect dung for themselves - only right which municipality had was to collect dung left on public streets - municipality became owner of pig dung only after collection and not before - auction sale can be regarded as sale of future unascertained goods - contract impossible to be performed as goods never came into existence - property in goods never passed to buyer - held, seller not entitled to recover sale price from buyer. - - as the defendant failed to pay the balance the present suit was filed against him. the plaintiff failed to establish that the defendant collected the pig dung during the material period. but in the..........may now be made to some of the provisions of the indian sale of goods act. under section 2 (6). 'future goods' means good to be manufactured or produced or acquired by the seller after the making of the contract of sale. under section 6 (1). the goods which form the subject of a contract of sale may be either existing goods, owned or possessed by the seller, or future goods. under section 6 (2) there maybe a contract for the sale of goods the acquisition of which by the seller depends upon a contingency which may or may not happen. section 6 (3) lays down that where by a contract of sale, the seller purports to effect a present sale of future goods, the contract operates as an agreement to sell the goods. as per section 23, in the case of a sale of unascertained or future goods, the.....
Judgment:

1. This appeal is filed by the plaintiff against a judgment of the learned Additional District Judge, Kurnool, dismissing the suit O. S. 78 of 1967. The plaintiff is the Municipal Council, Markapur represented by its Special Officer who filed the suit for recovery of Rs. 5504/- being the balance of the amount and penalty due from the defendant who was the contractor for collecting pig dung in the municipal area of Markapur for the year 1955-56. The case of the plaintiff is that at an open auction held on 16-3-1965, the defendant, became the highest bidder for Rs. 7050/- under which the defendant will be entitled to collect and appropriate the pig dung within the municipal area. The defendant paid an advance representating 1/4th of the bid amount and finally executed a written agreement Ex. A-6 on 2-6-1965 in favour of the municipality. As the defendant failed to pay the balance the present suit was filed against him. The suit was contested on the ground that the owners of the pigs prevented the defendant from collecting the pig dung, that the contract became impossible of performance and that the defendant was therefore discharged of this obligation under the contract to pay the balance. The defendant also contended that the municipality had no right to conduct an auction in respect of the collection of the dung. Another contention raised was that the agreement. Ex. A-6 was obtained from the defendant by misrepresentation. On a consideration of the rival contentions between the parties, the court below recorded the following finding: The agreement Ex. A-6 is true and was not executed under the circumstances mentioned by defendant. The plaintiff failed to establish that the defendant collected the pig dung during the material period. The plaintiff is entitled to recover one paisa per rupee per week towards penalty for non-payment of the balance. The plaintiff has no power to auction any such right to collect pig dung within the municipal area as it would amount to creating a monopoly and unauthorised delegation of its statutory duty under the public Health and Sanitation Rules. The plaintiff did not afford any facilities to the defendant in helping him to collect the pig dung. As the dung was taken away by the owners of the pigs, the contract became impossible of performance, by no fault of either party. In view of these findings, the plaintiff's suit was dismissed. Aggrieved y this judgment, the municipality filed the above appeal in this court. The same points were argued before me in this appeal by the learned counsel on either side.

2. In the first place, it is necessary to refer to some of the relevant provisions of the Andhra Pradesh Municipalities Act. Section 2 (15) defines 'filth' as meaning among other things, dung. Under Section 38 all rubbish and filth and other matter collected by or on behalf of a council under the Act shall belong to the council. Under Section 164 of the Act, the Municipal council shall make adequate arrangements for:

(a) the regular sweeping and cleaning of the streets and the removal of the sweeping therefrom;

(b) the daily removal of filth;

(c) daily removal or rubbish from the dust bins and it shall provide depots for the deposits of filth, rubbish and for its sale.

A perusal of the evidence given by P. W. 1. the Special Officer and Secretary of the Municipality, makes it clear beyond doubt that the defendant was obstructed in collecting the pig dung though he wants to qualify his admission that the defendants must have collected something though not to the extent expected. He admitted that subsequent to the contract, the defendant was complaining to him that the pig owners were preventing him from collecting the dung. He admitted that the dung did not belong to the municipality and that the owners of pigs were eking out their livelihood by selling the dung. He also admitted that the owners of the pigs actually collect the dung in baskets while following the pigs in the streets. When the defendant cancelled his contract, the plaintiffs reauctioned the right on 20-11-1965 but there was no bidder. No other material is placed before me to show that the defendant was able to collect the material during the contract period. I therefore confirm the finding of the trial court that the dung was removed by the owners of the pigs leaving nothing for the defendant.

3. The next pint which was argued before me is that the suit contract is in the ;nature of a farming contract and that the municipality has no authority under the Act or the Rules to enter into such a contract with reference to pig dung. While I agree that there is no rule or provision of law empowering the municipality to auction any such right, I hold that this contract as in the case of tolls, ferries, market placers, fishery rights, etc. In all these cases, the municipality has the right to collect the said dues and it is the said right that was being put to auction and transferred in favour of the purchaser. But in the present case, there is no such right in the municipality like the collection of the dung. The pigs do not admittedly belong to the municipality. It is not disputed that the owners who follow the pigs have got the right to collect the dung for themselves. It is of course open to the municipality to prevent the movement of pigs within municipal, area. The only right of the municipality is to collect the dung which was abandoned on the roads as part of its duty to clean the public streets by removing the rubbish. After the municipality collects the dung as rubbish, it becomes the owner thereof entitled to dispose of the same by sale to third parties. But at the stage when the dung is being deposited by the pigs, there is no right in the municipality to collect the same and hence the municipality is not competent to transfer any such right in favour of an intending purchaser. Under the provisions of the A. P. Municipalities Act, the municipality has the duty of getting the streets cleaned in the interests of public health and in the performance of such a duty, it will be open to the municipality either to get the street cleaned by its own scavenging staff or by employing any other person on a contract of labour. I do not therefore agree with the court below that there is any unauthorised delegation of the owners by the municipality.

4. But the true nature of the transaction appears to me to be a sale of future unascertained goods. Reference may now be made to some of the provisions of the Indian Sale of Goods act. Under Section 2 (6). 'future goods' means good to be manufactured or produced or acquired by the seller after the making of the contract of sale. Under Section 6 (1). the goods which form the subject of a contract of sale may be either existing goods, owned or possessed by the seller, or future goods. Under Section 6 (2) there maybe a contract for the sale of goods the acquisition of which by the seller depends upon a contingency which may or may not happen. Section 6 (3) lays down that where by a contract of sale, the seller purports to effect a present sale of future goods, the contract operates as an agreement to sell the goods. As per Section 23, in the case of a sale of unascertained or future goods, the property in the goods passes to the buyer only when the goods are in a deliverable state and are unconditionally appropriated to the contract either by the seller with the consent of the buyer or by the buyer with the consent of the seller. Under Section 26, the goods remain at the seller's risk until the property passes to the buyer. It is apparent from the foregoing provisions that the law permits the sale of future ascertained or contingent goods. There are instances of sale of what are known as potential future goods as for instance. sale of a crop to be raised on the seller's land, or the sale of the wool to be developed on the body of the seller's sheep or the milk yielded by the seller's cow. In all these cases, the seller owns the particular agent which produces the future article to be sold. But in the present case, it is a case of future contingent goods, for the simple reason that the pigs are not owned by the municipality. The sale of dung depends upon the contingency that pigs move about within the municipal area, that the dung is not washed away by heavy rains into the street drams and that it is left unclaimed without the owners collecting the same and so on. Under Section 38 of the A. P. Municipalities Act, referred to supra the dung which is part of the rubbish deposited on the streets belongs to the municipality only when it collects the same. Upon such collection, the rubbish or the dung becomes ascertained goods. whereafter as owner of such existing goods, it will be open to the municipality to sell the same to the highest bidder at an auction sale. For the purpose of collecting the dung, the municipality has to engage laborers or enter into a contract of labour to remove the same with a view to clear the public streets. There are therefore two stages before the Municipality can sell the dung. The first stage is to collect the dung, if any, left on the roads and secondly, to dispose of the same after such collection. The municipality becomes the owner of the dung only after collection and not beforehand. Instead of going through the two stages indicated above, the municipality straight way sold the dung which is really in the nature of future contingent goods, thereby leaving it to the purchaser to gather the same from the streets, obviously with a view to save the cost of removing the dung from the roads. Though the contract which was entered into by the municipality speaks about the sale of the right to collect the dung, it has to be regarded only as a sale of the future goods, namely, the dung after the municipality becomes the owner thereof. As I have already pointed out, the pigs do not belong to the municipality. There are owned by nomadic tribes like the yerukalas and Yenadis who eke out their livelihood by rearing pigs and collecting the dung. It is also common knowledge that the pig owners follow the pigs and collect the dung in baskets as and when the dung is deposited in the streets. The municipality becomes the owner of the material only after the municipality collects the same either through its scavenging staff or through the agency of a contract employed for the said purpose. In the present case, the dung was removed away by the owners thereof and hence there was no question of the municipality becoming the owner of the dung. The future contingent goods never came into existence and did not become ascertained goods in a deliverable state. The contract therefore became impossible of performance as the goods never came into existence. The contract between the parties rested upon the fundamental condition that the dung becomes available to the purchaser and when the said event did not happen due to no fault of either party to the bargain, there is a clear case of frustration of the contract. As pointed out by the Supreme Court in Satyabrata Ghosh v. Mugneeram Bangur & Co., : AIR1954SC44 .

'the word 'impossible' has not been use in the sense of physical or literal impossibility. The performance of an act may not be literally impossible but it may be impracticable and useless from the point of view of the object and purpose which the parties had in view; and if an untoward event or change of circumstances totally upsets the very foundation upon which the parties rested their bargain it can very well be said that the promisor finds it impossible to do the act which he promised to do.'

5. The learned counsel for the municipality placed reliance upon another principle which is also fairly established namely. that a contract s not discharged by frustration merely because the promissory suffers loss or meets with difficulties in the execution of such a contract. But having regard to the finding in the present case that the defendant was completely prevented from recovering the dung, I do not agree that this principle is attracted in this Cas.

6. The provision in the contract providing for payment of penalty is illegal and the said amount is not recoverable.

7. For all the above reasons, I hold that the contract is one for the sale of future goods, that they never came into existence, that no property in the goods passed to the buyer and that the seller is therefore not entitled to recover the sale price from the buyer. This is even a case where the buyer is entitle to refund of the advance paid by him. But as there was no such claim, the question does not arise. The appeal is therefore dismissed with costs.

8. Appeal dismissed.


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