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State of U.P. Vs. Mumtaz Hussain - Court Judgment

LegalCrystal Citation
SubjectContract
CourtAllahabad High Court
Decided On
Case NumberFirst Appeal No. 232 of 1963
Judge
Reported inAIR1979All174
ActsConstitution of India - Article 299; Contract Act, 1872 - Sections 2 and 70; Sale of Goods Act, 1930 - Sections 4
AppellantState of U.P.
RespondentMumtaz Hussain
Advocates:Standing Counsel
DispositionAppeal allowed
Excerpt:
constitution - government contracts - article 299 of constitution of india and sections 70 and 2(e) of indian contract act, 1872 - wrongful detention on state government's part alleged on grounds of contract of sale - contract not according to article 299 of the constitution as required - therefore not enforceable in law - no wrongful detention as alleged. - - the defendant and their departmental officers were perfectly justified in preventing the plaintiff from felling and exporting the timber of the trees which had not been sold to him. miles lying between dhimri and baur) and to submit a detailed report within ten days in a pro forma which amongst other things required them 10 state the number of trees, their location and girth as well (ex. 1) in the case clearly stated that he had.....h.n. seth, j.1. the first appeal by defendant state of u. p. is directed against the judgment of the additional civil judge, nainital dated 30-4-1963 decreeing the suit filed by sri mumtaz hussain contractor for a sum of rs. 31,338/-.2. the plaintiff mumtaz hussain filed the suit giving rise to the present appeal in the court of the civil judge, nainital alleging that he had purchased the entire shisham trees in the area between rivers dhimri and baur which are sold to him under an auction sale conducted by the agricultural officer, co-operative farm, rudrapur under the colonization scheme on 25-5-1952 for a sum of rs. 7,500/-. in due course he deposited the entire sale consideration and started cutting and felling the shisham trees and was expecting to complete the work before.....
Judgment:

H.N. Seth, J.

1. The first appeal by defendant State of U. P. is directed against the judgment of the Additional Civil Judge, Nainital dated 30-4-1963 decreeing the suit filed by Sri Mumtaz Hussain Contractor for a sum of Rs. 31,338/-.

2. The plaintiff Mumtaz Hussain filed the suit giving rise to the present appeal in the court of the Civil Judge, Nainital alleging that he had purchased the entire Shisham trees in the area between rivers Dhimri and Baur which are sold to him under an auction sale conducted by the Agricultural Officer, Co-operative Farm, Rudrapur under the Colonization Scheme on 25-5-1952 for a sum of Rs. 7,500/-. In due course he deposited the entire sale consideration and started cutting and felling the Shisham trees and was expecting to complete the work before 30-11-1952. Officials of the Forest Department, however, illegally and without authority started interfering with the plaintiff's work and finally stopped him from exporting timber and illegally seized all the timber cut by him. He, thereupon made representation to the Colonization Department. But to no effect. Even his prayer for extension of time to complete the work was unreasonably refused by the Colonization Department. According to the plaintiff he had collected 10,000 cubic feet of Shisham wood and thirty chattas of fuel wood which had been illegally detained by the Forest and Colonization Department of the State. As a consequence thereof, the plaintiff suffered a loss of Rs. 40,000/-. He, therefore, served a notice under Section 80 of the Code of Civil Procedure which did not yield any result. He had no option but to file the present suit claiming a decree for Rs. 40,000/-.

3. The defendant contested the suit and claimed that only 31 Shisham trees near village Sardarnagar, 10 Shisham trees near village Sakania, 5 Shisham trees near village Ahmednagar and 125 Shisham trees in the area from Baur Bridge up to Behra-Wazir (Total 171 trees) had been sold to the plaintiff on 25th of May, 1952. The plaintiff did not have any right to fell and carry away all the Shisham trees which were many more in number in the aforesaid area and he was also to observe the Rules and Regulations regarding the export of forest wood. The plaintiff started cutting and felling Shisham trees indiscriminately and stealthily in the area not covered by his contract. He was required by the Forest Department to stop doing so. The stacks of wood belonging to the plaintiff was taken possession of either by the Forest Department or by the Colonization Department and that the material which was earlier seized for want of proper Rawannas and property mark was subsequently released to the plaintiff, who had removed the same. In case any part of timber had been left behind, it was the responsibility of the plaintiff himself and the defendant is not liable on that account. The defendant further claimed that the suit was barred by time and the notice under Section 80 of the Civil P. C. was improper and illegal. They further claimed that as the parties did not enter into a contract in the manner provided in Article 299 of the Constitution no valid contract with regard to sale of 171 Shisham trees came into existence. Accordingly the plaintiff is not entitled to claim any damages in respect thereof.

4. After going through the evidence produced in the case, the trial court came to the conclusion that there were only, 171 Shisham trees standing in the area situate between river Dhimri and Baur and that all those Shisham trees had been, sold to the plaintiff on 25-5-52. It held that the Forest and the Colonization Departments obstructed the plaintiff in working out his contract and the Colonization Department was not justified in refusing to extend the period as prayed for by the plaintiff. Refusal by the Colonization Department to extend the period appeared to be mala fide. It also found that the plaintiff had felled all the 171 trees of Shisham which yielded timber measuring 11,283 cubic feet and 30 stacks of fuel wood. From out of this wood the plaintiff succeeded in exporting only 1837 cubic feet of timber. 9446 cubic feet of timber and 30 stacks of fuel wood remained at the spot which the plaintiff was not allowed to remove. The trial court repelled the claim that the contract in question was hit by Article 299 of the Constitution and held that in any case the plaintiff was, in view of the provisions of Section 70 of the Indian Contract Act, entitled to recover compensation from the defendant. In the result, it held that plaintiff was entitled to receive compensation for the timber at the average rate of Rs. 3/-per cubic feet and that for the firewood at the rate of Rs. 100/- per stack of fuel wood (total Rs. 31,338/-).

5. Being aggrieved the State of U.P. has come up in appeal before this court.

6. On 12-5-1952, Sri J. P. Naithani Agricultural Officer, Co-operative Farm, Rudrapur issued an auction notice informing all intending buyers that 171 Shisham trees standing near villages Sardarnagir, Sakhania, Ahmadnagar, Baur Bridge up to Bhora Vajer (Ex. 15) were to be sold by public auction on 25-5-1952 at 10 A.M. In pursuance of the aforesaid auction notice an auction took place at Rudrapur on 25-5-1952 in which the plaintiff made the highest bid of Rs. 7,500/-.

7. Learned Standing Counsel contended that as evidenced by the auction notice itself only 171 trees standing near the four villages mentioned above had been sold to the plaintiff. The plaintiff wrongly claimed that he had purchased all the trees standing in between rivers Dhimri and Baur which were many more in number and had actually felled and cut trees which he was not authorised to do. The defendant and their Departmental Officers were perfectly justified in preventing the plaintiff from felling and exporting the timber of the trees which had not been sold to him. Accordingly no question of awarding any damages to the plaintiff arose in this case.

8. The case of the plaintiff on the other hand is that total number of trees standing in the area between rivers Dhimri and Baur was 171 and that all those trees had been sold to him. He did not cut or fell tree that was not sold to him. In these circumstances the Departmental Officials were not justified in preventing him from felling the trees and exporting their timber. They had wrongfully appropriated the timber of the trees felled by the plaintiff and the defendants were liable to compensate him for the loss caused to him.

9. According to the statement of Sri Rameshwar Dayal (P.W. 8), the Stats Government had in the year 1947 formed a committee known as Tarai and Bhawar Development Committee. This committee made certain recommendations for colonisation and development of the area lying between rivers Baur and Dhimri. Sri Jagdish Narain (D.W. 10) deposed that the State Government on the basis of the recommendations made by the aforesaid committee, enforced a colonization scheme in the area in question and transferred the reserved forest in that area to the Colonization Department. Sri J. P. Naithani (D.W. 6) Agricultural Officer was also incharge of the Colonization Scheme. On 18-4-1952, he directed the Assistant Agricultural Inspectors Sri Singhasan Rai and Sri Satyapal Singh (D.W. 1) to count all the Shisham and Babobl trees in the entire 'Trans Dhimri' area (an area of 13 sq. miles lying between Dhimri and Baur) and to submit a detailed report within ten days in a pro forma which amongst other things required them 10 state the number of trees, their location and girth as well (Ex. A-2). In pursuance of this order Sri Satyapal Singh (D.W, I) who was at that time Assistant Agricultural Inspector Colonization Scheme Rudrapur went to the spot and after counting all the Shisham trees prepared a detailed report on 28-4-1952 (Ex, A-3) which showed that there were 171 Shisham trees in the Trans Dhimri area. He fixed the location of these trees as being near the four villages Sardarnagar, Sakania, Ahmadnagar and Baur-Bridge to Behra-Wazir. It was on the basis of aforesaid list prepared by Satyapal Singh that Sri J. P. Naithani drew up the auction notice on 15-5-1952 (Ex. 15). Appellants' own witness Sri Satyapal Singh who has appeared as (D.W. 1) in the case clearly stated that he had been asked to prepare a list of Shisham trees in the trans Dhimri area which meant the area between rivers Dhimri and Baur and that he actually counted those trees which were 171 in number and that besides those 171 trees, there were no other Shisham trees in the area;

10. Sri Shanker Singh (D.W. 5) the Assistant Colonization Officer, however, stated that there were several Shisham trees standing in the Ilaqa which lay between Dhimri and Baur rivers and that all the Shisham trees in that Ilaqa had not been sold to the plaintiff. Sri J. P. Naithani (D.W. 6) mentioned that in the entire area there were many more Shisham trees but then he was not in a position to state the exact number of Shisham trees standing in the area. It will thus be seen that with regard to the number of Shisham trees standing in the area, there is a difference between defendant's own witnesses. Whereas according to Sri Satyapal Singh there were only 171 Shisham trees, Sarvasri Shankar Singh and J. P. Naithani deposed that there were many more trees. It is significant to note that Sri Satyapal Singh had been asked to prepare a list of all Shisham trees standing in Trans Dhimri area and that he prepared a list accordingly (Ex. A 2). At that stage there was absolutely no occasion for Sri Satyapal Singh to give a wrong number of Shisham trees standing in the area. The statements made by Sarvasri Shanker Singh and J. P. Naithani that there were many more Shisham trees in the area is not borne out by anything on the record. In these circumstances we are inclined to accept the statement of Sri Satyapal Singh (D.W. 1) that there were only 171 Shisham trees standing in the Trans Dhimri area and that all these trees had been sold to the plaintiff.

11. Learned Standing Counsel appearing tot the defendant urged that under the orignal auction notice, only trees standing near four villages, namely Sardarnagar, Sakania, Ahmadnagar and Behra Wazir had been sold. However, the Inspection Note prepared by the Additional Civil Judge on 31-7-1961 shows that the plaintiff had at the tune of inspection admitted that he had felled trees in village Masit, Chaurasia, Vijaipur, Dhan-pur Block and Haripur block. The original auction notice dated 12-2-1952 showed that trees standing in the places mentioned' aforesaid had not been sold. It follows that in Trans Dhimri area, there were many more trees than 171 Shisham trees and that the plaintiff had felled trees which were not covered by the auction notice dated 12-5-1952. We are unable to a accept this submission. The auction notice dated 12-5-1952 did not mention that trees standing in villages Sardarnagar, Sakania; Ahmadnagar and Baur Bridge to Behra Wazir were being sold. Instead, it mentioned that trees standing near those villages were being sold. It is not disputed that villages Masit, Chaurasia, Dhanpur, Vijaypur and Haripur are located near villages Sardarnagar, Sakania, Ahmadnagar and' Baur Bridge to Behra Wazir. Accordingly, merely because the plaintiff admitted that some of the trees in villages Masit, Chaurasiya etc. were felled by him, it does not mean that he admitted cutting trees which were not sold to him. As stated earlier, Satyapal Singh (D.W. 1) had been asked by Sri Naithani to prepare a list of Shisham trees standing in Trans Dhimri area. All the aforementioned villages are located in Trans Dhimri area. Sri Satyapal Singh, instead of giving location of trees standing within the boundary of each individual village described the same by saying that they stood near the four villages mentioned in his report.

12. In these circumstances, we are inclined to agree with the conclusion arrived at by the learned Civil Judge that there were only 171 Shisham trees standing in Trans Dhimri area all of which had been sold to the plaintiff.

13. In this connection, it is significant to note that the case of the plaintiff is that he felled only 171 Shisham trees. Admittedly, some wood belonging to the plaintiff had been seized by the Forest Department on the ground that the plaintiff was not authorised to cut them. According to the defendants themselves they had, at a later stage decided not to pursue the matter any further and to release the seized timber etc. in favour of the plaintiff. This also shows that the defendant admitted that the plaintiff had not indulged in unauthorised felling of trees and that the seizure of the trees was not justified.

14. According to the plaintiff, at one stage the authorities of the forest department had seized timber of 43 trees felled by him on the ground that the plaintiff had indulged in unauthorized felling of trees. At a later stage when it was found that felling of the trees was not unauthorised, the Forest Department directed the timber of those trees to be released to him. However, the Forest Department did not release the entire timber to the plaintiff. The case of the defendant on the other hand is that after the timber of these 43 trees was seized and it was decided not to prosecute the plaintiff in respect thereof, the timber was returned to the plaintiff after obtaining receipt from his Munshi. In this regard the plaintiff admitted that he was returned only 8 logs under receipt (Ex. 57) on 2-1-53. The defendant pleaded that remaining timber of these 43 trees was returned to the Munshi of the plaintiff Girdhari Dutt under (Ex. A-8) and to Sheo Dutt under (Ex. A-12). The plaintiff and his witness maintained that Girdhari Dutt and Shiv Dutt were not his Munshis. There is no evidence in rebuttal on this point Accordingly, though it may be taken that from out of the 43 trees seized by the Forest Department, the timber covered by (Ex. A-8) was returned to the plaintiff, but then that covered by (Ex. 57) and (Ex. A-12) was not returned to him.

15. Again so far as timber of the remaining trees is concerned, the case of the plaintiff is that the same after being cut, was stacked along with stacks of fuel wood from these trees, at one place. The defendant did not permit the plaintiff to remove that timber, and after the time during which he was authorised to remove file timber under the auction sale held on 25-5-1972, expired the defendant gold all the timber to one Charan Singh. Accordingly, the plaintiff was deprived of, the use of the timber from the trees which had been validly cut and felled by him. The defendants denied that any timber belonging to the plaintiff had been sold by them to Sri Charan Singh.

16. (Ex. A-7) is the auction notice, according to which the logs which consisted of logs of Haldu, Babul, Jamun, Shisham, Aam, Tun Jhigna and Khair felled by mechanical device in the Colonization area were to be sold. Sri Charan Singh Contractor gave the highest bid for a sum of Rs. 25,350/-. He purchased the timber and wood covered by the auction notice and had removed the same.

17. The case of the defendants is that what was sought to be sold under (Ex. A-7) was the logs which had been failed by mechanical device i.e. by tractors and buldozers. Since the trees claimed to have been felled by the plaintiff had not been felled by mechanical device, the auction notice did not contemplate their sale to Charan Singh. It is significant to note that there were in the colonization area only 171 Shisham trees all of which were claimed to have been cut away by the plaintiff. In these circumstances no question of felling any Shisham tree in the area by mechanical device arose. Despite this the tender notice mentioned that there were logs of Shisham which had been felled by mechanical devices at the spot. It means that the Department was treating though wrongly that the trees which had been cut by the plaintiff and were lying in the. area were also the trees which had been felled by mechanical devices and that they wanted to sell the same. Learned standing Counsel,invited our attention to the order of confirmation of auction sale as recorded by the Deputy Director of Colonization on (Ex. A-7) wherein it was stated that logs of Haldu, Babul, Jamun, Aam, Tun Jhigna and Khair trees lying between Bhakra and Baur rivers had been sold to Charan Singh for a sum of Rs. 25,350/-. The confirmation note indicates that the Shisham trees had not been sold. He argued that even though (Ex, A-7) mentioned that Babul logs and Shisham logs were also to be sold but in fact no Shisham logs were sold to Charan Singh. We find that Sri Shanker Singh (D.W. 5) admitted that Shisham trees had also been sold to Charan Singh and stated that probably it was mistake that in the confirmation certificate issued by the Deputy Director of Colonization, no reference to Shisham trees was made. In these circumstances it appears that in the year 1953 the logs of Shisham trees had also been sold by the Department to Charan Singh. Since all the Shisham trees in the area had been purchased by the plaintiff those logs could only be from out of the timber of Shisham trees sold to the plaintiff and not from any other tree. It thus appears that the defendant did retain and dispose of substantial quantity of the timber of the trees which the plaintiff claims to have purchased in the auction sale held on 31-5-1954 and in case it is held that those trees actually belonged to the plaintiff or that the plaintiff was entitled to the same under the Contract, the plaintiff would be entitled to recover compensation from the defendant in respect thereof.

18. This brings us to the question as to whether there existed a contract, between the plaintiff on the one hand and the State of Uttar Pradesh on the other, whereunder the plaintiff had been entitled to remove 171 Shisham trees from the Trans Dhumri area and as to whether property in those trees had actually passed to the plaintiff.

19. Article 299 of the Constitution runs thus :--

'All contracts made in the exercise of the executive power of the Union or of a State shall be expressed to be made by the President, or by the Governor of the State, as the case may be, and all such contracts and ail assurances of property made in the exercise of that power shall be executed on behalf of the President or the Governor by such persons and in such manner as he may direct or authorise.'

20. In the instant case apart from auction notice dated 12-5-1952 (Ex. 15) by which the Agricultural Officer in-charge, Co-operative Farm, Rudrapur had notified that 171 trees mentioned therein were going to be sold by auction on 15-5-1952 there is no other document on the record which indicates as to how and in what circumstances the trees in question had been sold to the plaintiff. Certainly, there is oral evidence on behalf of the plaintiff which indicates as to what according to him the terms of the auction sale were. The transaction entered into between the parties had not been reduced to writing. In the circumstances Sri Jag-dish Swarup learned counsel appearing for the plaintiff-respondent expressed his inability to bring to our notice any document which it can be said incorporates the terms of the agreement or contract of sale of the trees in question. He was not in a position to show that the contract between the parties had been entered into as a result of exchange of written correspondence which spelled out the precise terms and conditions on which the offer for purchasing trees was made by the plaintiff to the Government and the same was accepted by a power authorised on behalf of and in the name of Governor of Uttar Pradesh.

21. In the case of Bhikraj Jaipuria v. Union of India : [1962]2SCR880 the provisions of Section 175(3) of the Government of India Act, 1935 which correspond to Article 299, of the Constitution came up for consideration before the Supreme court Shah, J speaking for the court observed thus:-- (at p. 119).

'(18) It is clear that the Parliament intended in enacting the provisions contained in Section 175(3) that the State should be saddled with liability for unauthorised contracts and with that object provided that the contracts must show on their face that they are made on behalf of the State i.e. by the Head of the State and executed on his behalf and in the manner prescribed by the person authorised. The provision, it appears, is enacted in the public interest, and invests public servants with authority to bind the State by contractual obligations incurred for the purposes of the State.

It is in the interest of the public that the question whether a binding contract has been made between the State and a private individual should not be left open to dispute and litigation; and that is why the legislature appears to have made a provision that the contract must be in writing and must on its' face show that it is executed for and on behalf of the head of the State and in the manner prescribed. The whole aim and object of the legislature in conferring powers upon the head of the State would be defeated if in the case of a contract which is in form ambiguous, disputes are permitted to be raised whether the contract was intended to be made for and on behalf, of the State or on behalf of the person making the contract. This consideration by Itself would be sufficient to imply a prohibition against a contract being effectively made otherwise than in the manner prescribed. It is true that in some cases, hardship may result to a person not, conversant with the law who enters, into a contract in a form other than the one prescribed by law. It also happens that the Government contracts are sometime made in disregard of the forms prescribed, but that would not in our judgment be ground for holding that departure from a provision which is mandatory and at the same time salutary may be permitted.'

22. While taking the aforesaid view, Shah J., was fully conscious of the observations made by Bpse. J., in the case ofChaturbhuj Vithaldas Jasani v. Moreshwar Parasram : [1954]1SCR817 whichwere to the following effect:-- (at p.243).

'that if in fact a contract is unauthorised or in excess of authority it is right that Government should be safeguarded On the other hand, an officer entering into a contract on behalf of Government can always safeguard himself by having recourse to the proper form. In between is a large class of contracts probably by far the greatest in number which though authorised are for one reason or other not in proper form. It is only right that an innocent contracting party should not suffer because of this and if there is no, other defect or objection Government will always accept the responsibility. It would be disastrous to hold that the hundreds of Government Officers who have daily to enter into a variety of contracts often of a petty nature and sometimes in an emergency, cannot contract orally or through correspondence and that every petty contract must be effected by a ponderous legal document couched in a particular form. It may be that Government will not be bound by the contract in that case, but that is a very different thing from saving that the contracts as such are void and of no effect. It only means that the principal cannot be sued; but there would be nothing to prevent retaliations especially if that was for the benefit of Government.'

and had explained their real import.

23. In the case of Union of India v. A. L. Rallia Ram : [1964]3SCR164 , it was observed thus: (at pp. 1689, 1690).

'Section 175(3) does not in terms require that a formal document executed on behalf of the Dominion of India, and the other contracting party alone is effective. In the absence of any direction by the Governor General under Section 175(3) of the Government of India Act prescribing the manner a valid contract may result from correspondence if the requisite conditions are fulfilled. It is true that Section 175(3) uses the expression 'executed' but that does not by itself contemplate execution of a formal contract by the contracting parties. A tender for purchase of goods in pursuance of an invitation issued by or on behalf of the Governor General of India and acceptance in writing which is expressed to be made in the name of Governor General and is executed on his behalf by a person authorised in that behalf would conform to the requirements of Section 175(3).'

According to this decision provisions of Article 299 of the Constitution are mandatory and any contravention of the provision would make the contract unenforceable in law. Requirement of Article 299 of the Constitution is fulfilled (1) when the contract is executed by a person authorised to execute the same on behalf of the Government, and (2) it is expressed to have, been made by or on behalf of the Governor of State. However, execution of contract does not necessarily imply execution of a formal document. The contract can be inferred even in cases where the offer is made in writing by a person authorised to make that offer on behalf of the Government and he expresses the same as being made by or on behalf of the Government or the Governor. Similarly where the offer made by another person is accepted by the Government, the acceptance has to be made in writing by the person authorised by the Governor or the Government and he had to express the same as being made in the name of the Governor or the Government.

In Union of India v. N. K. Private Ltd. : [1972]3SCR437 . Reddy J., made the following observations:-- (at p. 919).

'The crucial question which arises for determinatipn is whether there was a concluded contract and if there was one, whether the mandatory requirements of Article 299 of the Constitution for entering into a valid and binding contract have been satisfied. It is now settled by this Court that though the words 'expressed' and 'executed' in Article 299(1) might suggest that it should be by a deed or by a formal written contract, a binding contract by tender and acceptance can also come into 'existence if the acceptance is by a person duly authorised in this behalf by the President of India. A contract whether by a formal deed or otherwise by persons not authorised by the President cannot be binding and is absolutely void.' While making the aforementioned observation Reddy. J., reiterated the position as explained by Shah. J., in the case of Union of India v. A. L. Rallia Ram : [1964]3SCR164 . All that he intended to convey was that Article 299(1) of the Constitution does not require that there should be a single formal document evidencing the contract. The contract can also be inferred if there was tender and acceptance in (sic) the case needs be by the Government in accordance with the provisions of Article 299 of the Constitution. The learned Judge however, made it clear that a contract whether formal or otherwise entered into by a person not authorised by the President could never bind the President and would be absolutely void. These observations in our opinion do not imply that the contract if entered into by a person authorised by the President or the Government would be effective even if it does not purport to have been made in the name of the head of the State or the Government. Since in the present case, the contract relied upon by the plaintiff is not in writing and can also not be inferred from any correspondence in which compliance with the provisions of Article 299 of the Constitution could have been made, it is not possible to enforce the same against the State and to pass any decree in favour of the plaintiff on its basis.

24. Sri Jagdish Swarup learned counsel for the plaintiff then contended that the trees in respect of which the auction sale was held by Sri Naithani on 25-5-1952 (who according to him was competent to sell the same on behalf of the State) were goods within the meaning of Sale of Goods Act, As soon as the bid made by the plaintiff was accepted by Sri Naithani and it was eventually confirmed by Deputy Director Colonization the sale was complete and the transaction passed from the domain of contract to that of sale and the plaintiff became owner of the trees sold to him. As the officials of the State Government had wrongfully detained these trees the State was liable to compensate him in an action for tort committed by those officers. However before an action for tort alleged to have been committed by the officials of the State Government can be maintained the plaintiff has to show that the property in the trees actually passed to him and that he had become owner thereof.

25. While considering the question whether title in the trees had passed to the plaintiff it may be assumed that the standing trees which the plaintiff claims to have purchased in the auction sale are goods within the meaning of Sale of Goods Act 1930 and further that the title in the goods would pass to the plaintiff if the transaction in question fell within the domain of 'sale' as contemplated by that Act.

26. Section 4 of the Sale of Goods Act, 1930 runs thus :--

'4. (1) A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part-owner and another.

(2) A contract of sale may be absolute or conditional.

(3) Where under a contract of sale the property in the goods is transferred from the seller to the buyer a contract is called a sale but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled the contract is called an agreement to sell.

(4) An agreement to sell becomes a sale when the time lapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.'

A reading of the aforesaid section shows that before a sale can come into existence there has to be a contract whereby the seller transfers or agrees to transfer the property in the goods to the buyer for a price. Such a contract may either be absolute or conditional. Where under a contract of sale property in the goods is passed immediately, the contract is called a sale. But if the contract contemplates that the property in the goods would pass on a future date or on happen^ ing of some contingency. It would become a sale when that future contingency happens or the condition is fulfilled and till then the contract of sale is designated as an agreement to sell. Accordingly existence of a contract of sale is sine qua non for the coming into existence of a sale. No doubt when Sri Naithani put up the Shisham trees for auction and invited bids he invited offers for purchasing the trees and the offer was accepted and an agreement as contemplated by Section 2(e) of the Indian Contract Act came into existence. However, according to Section 2(h) of the Indian Contract Act, only such agreements which are enforceable in law are called 'contracts'. Agreements which are not enforceable in law are as laid down in Section 2(g) of the Contract Act, said to be void. Accordingly, before a contract of sale can come into existence it must be shown that there was an agreement between the State Government and the plaintiff which was enforceable in law. In view of provisions of Article 299 of the Constitution as interpreted by various Supreme Court cases mentioned above such an agreement cannot be enforced unless the provisions thereof have been complied with. As the agreement in the instant case had not been made in accordance with the provisions of Article 299 of the Constitution, the same could not be enforced and was void against the State. Such an agreement therefore cannot amount to a contract of sale and as such no question of the transaction passing on into the domain of actual sale, as contended by Sri Jagdish Swarup arose in this case. Since no transaction amounting to sale took place, the title in the Shisham trees throughout remained with the State Government and for this reason the plaintiff cannot maintain an action for tort against the State Government on the ground that its officials had misappropriated some property belonging to him.

27. The plea raised by the appellant that the suit deserved to be dismissed op account of non-compliance with the provisions of Article 299 of the Constitution therefore has to be accepted.

28. Learned standing counsel also urged that the bid made by the plaintiff for purchasing the Shisham trees had not been accepted by the person who was entitled to enter into a contract on behalf of the State Government and that for this reason also plaintiffs did not acquire any right in the trees and that this suit deserved to be dismissed. In support of this submission he filed an affidavit before this Court. However in the view which we have taken it is neither necessary for us to go into this question nor is it necessary to take the affidavit filed at this stage into consideration.

29. Reliance placed by the trial court on Section 70 of the Contract Act appears to be misplaced. Section 70 of the Indian Contract Act runs thus :--

'Where a person lawfully does anything for another person or delivers anything to him not intending to do so gratuitously, and such other person enjoys the benefit thereof the latter is bound to make compensation to the former in respect of or to restore the thing so done or delivered.'

Before a claim under Section 70 of the Contract Act can be made following conditions have to be fulfilled :--

(1) That a person should lawfully do something for another person or deliver something to him.

(2) In doing the aforesaid thing or delivering the said thing, he must not intend to act gratuitously; and

(3) that the other person for whom something is done or to whom something is delivered must enjoy the benefit thereof.

30. In the instant case the claim made by the plaintiff is for compensation for wrongful detention of timber which the plaintiff claims had been purchased by him. It cannot be said that the plaintiff either did something for the State or that he delivered the timber to the State not intending to do so gratuitously. The timber was according to the plaintiff wrongfully seized and misappropriated by the officials of the State. It may be that if the plaintiff had succeeded in making out 3 case that the timber of the Shisham trees belonging to him had been seized by the defendant he may have been able to recover compensation for wrongful detention thereof by the employees of the State but then he cannot maintain a claim under Section 70 of the Indian Contract Act.

31. In the result, the appeal succeeds and is allowed. The decree passed by the trial court is set aside and the plaintiff's suit is dismissed. However, considering the entire circumstances we direct the parties to bear their own costs throughout.


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