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Government of State of Orissa, Bhubaneshwar Vs. Jaldu Rama Rao and Company, Machilipatnam - Court Judgment

LegalCrystal Citation
SubjectContract
CourtAndhra Pradesh High Court
Decided On
Case NumberAppeal No. 1108 of 1975
Judge
Reported inAIR1983AP214
ActsSpecific Relief Act, 1963 - Sections 34; Code of Civil Procedure (CPC), 1908 - Sections 9 and 11 - Order 7, Rule 7
AppellantGovernment of State of Orissa, Bhubaneshwar
RespondentJaldu Rama Rao and Company, Machilipatnam
Appellant AdvocateT. Veerabhadrayya, Adv.
Respondent AdvocateC. Poornaiah, Adv.
Excerpt:
.....relief act, 1963 and sections 9 and 11 and order 7, rule 7 of code of civil procedure, 1908 - suit filed in lower court claiming compensation for breach of contract - lower court granted decree on ground of contractual rights - appeal against decision of lower court on ground that bare declaratory relief touching contractual right not accompanied by consequential relief is barred under section 34 - bare declaratory relief can be granted if it constitutes relief in nature of legal right or right to property - relief prayed for cannot be said bare relief only - initial relief for declaration is step in aid and is to obtain subsequent relief - plaintiff had to establish that they did not contribute to breach of contract - in circumstances initial relief cannot be said as bare..........no difficulty inn confirming the conclusion regarding additional issue framed on 26-4-1968 and the suit filed is within time. the vital issue that has been argued by the learned to the bar of res judicata. to appreciate the contentions it is necessary to have a close-up of the facts pertaining to this issue. the suit was filed by the 1st defendant in t.s. 12/61 on the file of the court of the 1st additional subordinate judge, cuttack. the plaintiffs in the said suit are state of orissa and dr. mohanti being defendants 1 and 2 in the present suit. the 1st defendant in that suit is the plaintiff in this suit and the 2nd defendant is the state trading corporation. the relief sought in the said suit is that the plaintiffs are not liable for any breach of contract for the purpose of conveying.....
Judgment:

Rama Rao, J.

1. The appellant is the 1st defendant the plaintiff is a firm carrying on business as stevedores, clearing and forwarding Agents at Machilipatnam. The suit is filed for breach and forwarding agents at machilipatnam. The suit is filed for breach and forwarding Agents at Machilipatnam. The suit is filed for breach of contract claiming damages to the tune of Rs. 11,750/- with subsequent interest. The agreement was reached between the plaintiff and the 1st defendant that the iron ore belonging to the Government of orissa should be exported from paradeep post in orissa to foreign countries by steamers and the rate that was agreed to be given to the plaintiff is Rs. 3/- per ton by telegram dated 14-5-1958 the plaintiff was informed that the japanese vessel S. S. Golden Kappa was calling at the port on 23-5-1958 the plaintiff should be ready to undertake the loading work by subsequent telegrams and also by letter dated 16-5-1958 sent by the state Trading corporation of India. The plaintiff was intimated that the vessel S. S. Golden kappa was chartered for transporting 4000 tons of iron ore from paradeep and requested the plaintiff to send three copies of their daily reports about stevedores work.

After the arrival of the steamer the plaintiff's managing partner along with 30 of his men boarded the steamer on 28-5-1958. Two barges were arranged to be put along side the steamer and one of them was not able to put along side the steamer and hence returned back. When the activity of arranging hatches and cargo gear to prepare loading operations was going on. The master took away the vessel stating that he would return on the next morning. The next day the steamer called to calcutta taking 30 labourers and also the managing partner of the plaintiff firm without adhering to the programme of loading. In reply to the plaintiff's letter dated 5-6-1958 claiming payment of Rupees 13,005/- the 2nd defendant. Addl. Secretary in the Government of orissa discussed the matter with the plaintiff's managing partner at Delhi and requested him to send revised bill showing some concession. Accordingly the plaintiff sent revised bill with a letter dated 6-9-1958 claiming an aggregate amount of Rs. 11.750/- but even this amount was not paid. After issuance of notice under sec. 80 C.P.C the suit was filed on 23-4-1959 As the plaint was returned on the ground that the suit was filed even before the prescribed period of 60 days under sec. 80 C.P.C. expired the plaintiff was obliged to issue another notice on 30-12-1960 and filed the suit later on.

The plea of the defendants is that the Court at Machilipatnam has no jurisdiction to try the suit as no part of the cause of action arose within the jurisdiction of that Court and that the suit as framed is not maintainable. There was no valid contract enforceable against the state of orissa as the contract was not in writing in the name of governor of orissa and was not executed on his behalf by any person authorised by him in the manner contmplated under art. 299 of the Constitution.

It was also stated that all the stevedoring labour did not arrive at cuttack as alleged but only some of them have arrived. The arrival of the steamer was delayed due to unforeseen circumstances by a few days and even though the plaintiff's managing partner and the labourers boarded the ship they did not make any arrangement for loading the steamer and after 9.00 p.m. M.V. Ambug had to move away from the steamer to a safer distance on receipt of the information from the captain of the steamer. On the next day as there was no response from the plaintiff's men to load even though M.V. Ambug went to the ship at 4.00 a.m. and the second barge M.V. Kite also went near the steamer, the steamer had to leave for calcutta as per shore instructions on account of weather conditions. Therefore the plaintiff's men failed to load the ore in the ship. The allegation of admission of liability and the request to send the revised bill is denied. The plaintiff was intimated to submit an account of the actual expenditure so that the 1st defendant may consider whether it is possible to make some payment. There was no legally enforceable contract and there was no failure on the part of the defendants the cause of action did not arise at Machilipatnam.

The defendants filed a suit against the plaintiff in the Court of the subordinate Judge, cuttack for declaration that they are not liable for any breach of contract and that the plaintiff is not entitled to claim the sum of Rs. 11,750/- or any amount and also a decree for recovery of Rs. 700/- on the above pleadings the following issues were framed:-

1. Whether the suit contract is true valid and binding?

2. Whether the defendant committed breach of the same?

3. If so to what amount if any is the plaintiff entitled as damages?

4. Whether this Court has jurisdiction?

5. To what relief?

Addl. Issue framed on 26-11-1965.

6. Whether the decree passed in T.s. 12/61 on the file of sub-court cuttack operates as res judicata in this cuttack operates as res judicata in this case

Addl. Issue framed on 26-4-1968.

7. Whether the suit is in time?

2. The learned Additional District Judge answered issues 1, 2, 4 and additional issue framed on 26-4-1968 in the affirmative and with respect to issue No. 3 the decree was granted as prayed for and regarding issue No. 6 the Court below held that the decree passed in T.s. No. 12/61 on the file of sub-court. Cuttack does not operate as res judiciata.

3. The learned counsel for the appellant contends that in respect of all the issues the learned District Judge failed to consider in proper perspective and particularly with respect to resjudicata the learned Judge erred to resjudicata the learned Judge erred in holding that the decree in T.S. 12/61 on the file of the sub-court. Cuttack does not operate as res judicata. The learned counsel for the respondents tried to sustain the judgment of the Court below on the grounds given by the learned district Judge and reiterated the contentions put forward in the Court below.

4. In so far as issue No. 1 is concerned the finding has been arrived at by the Court below on an appraisal of the facts and circumstances and we confirm the reasoning and conclusion regarding the same. It cannot be disputed that part of th cause of action arose at Machilipatnam and therefore the Court at Machilipatnam has jurisdiction and the conclusion of the Court below regarding issue No. 4 is confirmed. There is no difficulty inn confirming the conclusion regarding additional issue framed on 26-4-1968 and the suit filed is within time. The vital issue that has been argued by the learned to the bar of res judicata. To appreciate the contentions it is necessary to have a close-up of the facts pertaining to this issue. The suit was filed by the 1st defendant in T.S. 12/61 on the file of the Court of the 1st Additional subordinate Judge, cuttack. The plaintiffs in the said suit are state of orissa and Dr. Mohanti being defendants 1 and 2 in the present suit. The 1st defendant in that suit is the plaintiff in this suit and the 2nd defendant is the state Trading corporation. The relief sought in the said suit is that the plaintiffs are not liable for any breach of contract for the purpose of conveying the Iron ore from paradip port and therefore the 1st defendant was not entitled to claim a sum of Rs. 11,750/- and a decree for recovery of Rs. 700/- advanced to Ramachandramurthy the clerk of the plaintiff in this suit to meet the expenses for the labour. Who were staranded at paradip. This suit was admittedly filed after the plaint in O.s. 15/59 was returned by sub-court. Machilipatnam.

5. Regarding the contention founded upon res judicata the learned counsel for the appellant stressed that the subject-matter of the suit is identical with that of the issues decided in T.S. No. 12/1961 on the file of the 1st Additional sub-court, cuttack. The learned counsel for the respondent contended that the plea of res judicata does not come to the aid of the appellant as the decree passed in T.S. 12/1961 on the file of the Court of 1st Additional subordinate Judge, cuttack is a nullity in view of prayer for bare declaration only without being accompanied by consequential relief. The learned counsel for the respondent relied upon the decision of the madras High Court in ramakrishna v. Narayna (AIR 1915 Mad 584). In this case the relief is for declaration for compelling the defendant to receive the amount due by the plaintiff for the 6th drawing after declaring that the plaintiff is entitled to pay subscription for the Kuri it was held that the suit for declaratory relief in respect of rights arising out of a contract pertaining to mere pecuniary relationship will not lie and the declaration sought is not a right to declare a title to a legal character or a title to right to a property.

In Madanlal v. State of Madhya bharat (AIR 1955 Madh Bha 111) the reliefs claimed are for a declaration that the plaintiff was not personally responsible for payment of any amount due on account of the sale and distribution of food grains pursuant to the contract between the congress committee basoda and the state and for an injunction restraining the state from recovering any amount forever from the plaintiff. In this context it is held that the question of plaintiff's legal character or any right to property is not involved and as such the suit is not maintainable under sec. 42 of the specific Relief Act.

In Ramnarayan v. Mangeram Radheshyam : AIR1979MP61 on the settlement of account between the parties on 26-6-1975 the sum of Rupees 1,02,521/- was found due from the defendant tothe plaintiffs. Notwithstanding the final settlement of account the defendant claimed Rs. 41,509,63 more than the amount settled there upon the plaintiffs filed a suit for a declaration that they are not liable to pay the said amount. It was held that the suit is not maintainable on such a bare declaration and it was further held that declaratory decree may be granted by the courts under general provisions of sec. 9 or O. 7 R. 7 C.P.C also and the exercise of jurisdiction beyond the terms of sec. 34 of the specific Relief Act is justified when the declaration is a step to a relief in some other case or when a declaration in itself is a substantial relief and has immediate coercive effect depending upon facts of each case.

In Vemareddy Ramaraghava v. Konduru seshu, : AIR1967SC436 the Supreme Court held that S. 42 of the specific Relief Act is not exhaustive of the cases in which a declaratory decree may be made and the courts have power to grant such a decree independently of the requirements of the section. Similar view was taken in the decision in supreme Gneral Films exchange Ltd. V. Brijnath singhji, : [1976]1SCR237 wherein it was theld that the Court is competent to grant declarations in appropriate cases falling outside sec. 42 of the specific Relief Act. In Mahabirjute Mills v. Firm kedar Nath a suit was filed for a declaration that the contract between the parties does notsubsist and the plaintiff on the that account is not liable for damages for breach of contract. It was held that the right must relate to legal character or right to any property and the declaration that the plaintiff has not incurred any pecuniary liability cannot be equated to an adjudication about 'legal character' or right to property. The connotation of expression 'legal character' in sec. 42 of the specific relief Act was considered and it was held that the legal character is equivalent to legal status and does not contemplate declarations about the pecuniary liability of persons.

The principles that emerge from the above decision can be summed up. The bare declaratory relief touching the contractual right not accompanied by a consequential relief is barred under S. 42 (old) and sec. 34 (present) of the specific Relief Act and the bare declaratory relief can be granted if it constitutes relief in the nature of legal right or right to property. Sec. 34 of the specific Relief Act is not exhaustive of all the circumstances and recourse to O.7 R. 7 C.P.C. is not excluded in appropriate cases.

6. The relief prayed for in the suit on the file of orissa Court cannot be considered as bare relief only. The initial relief for declaration is a step in aid and is a route to obtain subsequent relief. The plaintiffs had to necessarily establish that they did not contribute to the breach of contract to enable them to recover the sum of Rs. 700/- therefore, in the circumstances the initial relief claimed cannot be labelled as bare declaratory relief. The issue was framed regarding the maintainability of suit and applicability of the specific Relief Act and the Court on an appraisal of facts and the Court on an appraisal of facts and circumstances negatived the plea of applicability of the specific Relief Act. Even otherwise the decree can be sustained as one under the discretion exercised by the Court under sec. 34 of specific Relief Act coupled with O.7 Rule 7c.P.C the non-maintainability of suit on the score of inhibition contained in sec. 34 cannot be stretched to the region of nullity. The decision or decree even if it is grievously erroneous is liable to be set aside by a competent forum but it will not be null. The entirety of the subject-matter of the suit is an occupied filed in T.S. 12/1961 on the file of sub-court cuttack and hence the res judicata under sec. 11 C.P>C is squarely applicable. Even assuming that the suit is not maintainable under sec. 34 of the specific Relief Act it cannot constitute as a bar to the applicability of res judicata. The relief prayed for in the suit or the structure and texture of the decree or the maintainability of the suit in relation to sec. 34 of the specific Relief Act are not the criteria for attracting sec. 11 C.P.C apart from other facts the competency of the Court passing the decree is a vital component in sec. 11 C.P.C. the competency of the Court comprises territorial pecuniary jurisdiction or inherent lack of jurisdiction or in the like nature. The Court is not robbed of its competency of the Court comprises territorial. Pecuniary jurisdiction or inherent lack of jurisdiction or in the like nature. The Court is not robbed of its competency even if it is decided that a particular suit is not maintainable under the provisions of any Act or otherwise the moulding of the relief in the suit militating against the provisions of section 34 of specific Relief Act or any other provisions does not oust the jurisdiction of the Court. The non-maintainability of the suit should not be confused or mixed up with the comptency of the Court.

7. The learned district Judge held that the cuttack Court has no Jurisdiction and lacks inherent competence to entertain the suit and the Court was misled regarding the subject matter of the suit and the jurisdiction was invoked fraudulently. It cannot be disputed on the facts that the part of cause of action arises within the jurisdiction of the cuttack Court. It is patent that the cuttack Court framed all the necessary issues and randered judgment on appreciation of the facts and circumstances, the learned Judge erred in holding that the invocation of jurisdiction is farudulent and that there is inherent lack of jurisdiction the learned judge did not advert to the real crux of the matter germane to the consideration. In the view taken above. It is not necessary to consider the issues 2 and 3.

8. In the circumstances, the Judgment of the Court below is set aside and the appeal is allowed. No costs.

9. Before parting we have to say that the technical plea enabled the orissa Government to avoid the claim. It is on record that the one stage the Government was reconciled tot he payment of some amount to the plaintiff and was prepared to have a dialogue will it not be magnanimous on the part of the Government to consider and settle the claim after negotiations?

10. Appeal allowed.


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