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Lucknow Nagar Mahapalika Vs. Sardar Karamjeet Singh and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtAllahabad High Court
Decided On
Case NumberFirst Appeal No. 38 of 1952
Judge
Reported inAIR1962All174
ActsUttar Pradesh Town Improvement Act, 1919 - Sections 2(7), 65, 66 and 97(1); Town Improvement Trust Act
AppellantLucknow Nagar Mahapalika
RespondentSardar Karamjeet Singh and ors.
Appellant AdvocateNaziruddin and ;Raj Narain Srivastava, Advs.
Respondent AdvocateB.K. Dhaon and ;Sudhir Shanker, Adv. for Respondent No. 1
Excerpt:
property - limitation - sections 97(1), 2(7), 65 and 66 of u.p. town improvement act,1919 - suit by bidder - refund of one fourth price - suit is not in respect of act to be done by trust under act - limitation for filing suit is 3 years - limitation provided under section 97 not applicable which is six months. - - is a suit by a bidder at an auction held by the lucknow improvement trust for selling land in connection with a scheme framed by it under the town improvement trust act, for refund of one-fourth price deposited by him on his bid being accepted, but which was subsequently forfeited by the trust oh account of his failure to pay the. a perusal of the section shows that it has clearly no application. (4) .upon a reading of this section and on a reference to the facts of the.....r.a. misra, j. 1. the question referred to this bench for answer was; 'whether a suit based on a contract is governed by section 97 of the town improvement act or it is governed by the general law of limitation,' after considering the circumstances of the case, and in agreement with the learned counsel for the parties, we have re-drafted the question and now it reads: 'is a suit by a bidder at an auction held by the lucknow improvement trust for selling land in connection with a scheme framed by it under the town improvement trust act, for refund of one-fourth price deposited by him on his bid being accepted, but which was subsequently forfeited by the trust oh account of his failure to pay the. balance within the prescribed time, a suit in respect of an act purporting to be done by the.....
Judgment:

R.A. Misra, J.

1. The question referred to this Bench for answer was;

'Whether a suit based on a contract is governed by Section 97 of the Town Improvement Act or it is governed by the general law of limitation,'

After considering the circumstances of the case, and in agreement with the learned counsel for the parties, we have re-drafted the question and now it reads:

'Is a suit by a bidder at an auction held by the Lucknow Improvement Trust for selling land in connection with a scheme framed by it under the Town Improvement Trust Act, for refund of one-fourth price deposited by him on his bid being accepted, but which was subsequently forfeited by the Trust oh account of his failure to pay the. balance within the prescribed time, a suit in respect of an act purporting to be done by the Trust under the Act?'

2. The brief facts of the case in which the question has arisen are that on 5th December, 1947, the Lucknow Improvement Trust -held an auction sale of the lease-hold rights of plots 8 and 9 of the Revised Lay out Plan of Naka Hindola Scheme Lucknow and accepted Rs. 21,750/- on account of 1/4th sale consideration, as part payment of the total sale consi-deration of Rs. 87,000/- from one Sardar Bahadur Singhar Singh, since deceased. One of the terms of the auction sale was that the remaining 3/4th's sale consideration must be paid by the purchaser within ten days from the date of the auction, failing which the 1/4th sale consideration deposited by him would stand forfeited. On 13th December, 1947, before the expiry of ten days from the date of auction sale, the purchaser wrote to the Improvement Trust, Lucknow, that he was unable to pay the 3/4th's balance within thetime fixed and asked for its extension by two months but he received no reply to it.

By a resolution dated 13th April, 1948, the Improvement Trust, Lucknow forfeited the 1/4th advance sale consideration paid by Sardar Bahadur Singhar Singh on the ground of non-payment of the 3/4th's balance within tendays, as agreed under the terms of the auction,and the resolution was conveyed to, the purchaser. The purchaser Sardar Bahadur Singhar Singh died on 10th January, 1948, and the three plaintiffs as his sole legal representatives sued the Improvement Trust on 5th December-1950, for the return of Rs. 21,750/- Which had been accepted by it from Sardar Bahadur Sing-fear Singh on 5th December, 1947, with interest and costs. Before instituting the suit, however, the plaintiffs had on 2nd December, 1949, served the defendant Trust with a notice under Section 97 of the Town Improvement Act asking it to return the amount in question but the defendant did not return the same.

3. The suit was contested on behalf or of the Improvement Trust on a large number of grounds including limitation . This plea gave rise to issue No. 4 in the suit which was 'Is the suit barred by limitation?' It appears from the judgment of the trial Court that at the time of arguments the plea of limitation was given up by the defendant.

While discussing issue No. 4, the trialcourt has observed:

'The plea of bar of limitation was intended to be raised on the basis of Section 97 of the Town Improvement Act but it was conceded that that section could hardly apply. A perusal of the section shows that it has clearly no application. Issue is decided against the defendant.'

The trial Court decreed the plaintiffs' claim and directed that the parties should bear their own costs.

4. Dissatisfied with the judgment and decree passed by the trial court, the defendant. Improvement Trust has filed this appeal.

5. The question whether the suit of the plaintiffs was barred by limitation on account of the provisions of Section 97 of the U. P. Town Improvement Act, being a pure question of law, was allowed to be raised in this Court again even though it had been conceded before the trial Court.

6. Before a Bench of this Court, of which one of us was a member and, which first heard this appeal, it was urged by the defendant appellant that the suit of the plaintiffs respondents should be dismissed as time barred on accounts of the provisions of Section 97 of the U. P. Town Improvement Act, which prescribed a limitation of six months only, after two months' notice for a suit of the present nature. It has already been noted that the money in question was deposited by Sardar Bahadur Singhar Singh on 5th December, 1947 and the present suit for its return was filed by his heirs on 5th December, 1950, just on thelast day of the expiry of three years and, therefore, much beyond six months.

In the opinion of the Bench, which heard the appeal first, there was a conflict of opinion since long on the question of the applicability of Section 97, Town Improvement Act, between the various authorities of this Court, and the question has therefore been referred to the Full Bench for answer.

7. The relevant parts of Section 97 of the U. P. Town Improvement Act read as below :

'97 (1) No suit shall be instituted against the Trust or any trustee, or any person associated with the Trust under Section 14 or any member of a committee appointed under Section 15, or any officer or servant of the Trust, or any person acting under the direction of the Trust or of the chairman or of any officer or servant of the Trust, the Trust in respect of an act purporting to be done under this Act, until the expiration of two months next after notice in writing has been, in the case of a Trust, left at its office, and in any other case delivered to or left at the office or place of abode of the person to be sued, explicitly stating the cause of action, the nature of the relief sought, the , amount of compensation claimed and the name and place of abode of the intending plaintiff; and the plaint shall contain a statement that such notice has been so delivered Or left.

(2) ... ...... (3) No action such as is described in Sub-section (1) shall, unless it is an action for the recovery of immovable property or for a declaration of title thereto, be commenced otherwise than within six months next after accrual of the cause of action. (4) .. .. .. .. .'

Upon a reading of this section and on a reference to the facts of the case before us, it is clear that our answer to the question referred to us will depend on whether or not it can be said that the forfeiture of the 1/4th amount, of the sale consideration deposited by Sardar Bahadur Singhar Singh because of the latter's failure to deposit the 3/4th balance within ten days as required under the terms of auction sale was an act purporting to be done under the U. P. Town Improvement Act.

8. On behalf of the appellant reference is made to Section 2, Sub-section (7) of the Town Improvement Act which reads:

'(7) all references to anything done, required, authorised, permitted, forbidden, or punishable, or to any power vested, under this Act, shall include anything done, required, authorised, permitted, forbidden, or punishable or any power vested-

(a) by any provision of this Act; or

(b) by any rule or scheme made under the provisions of this Act; or

(c) under any provision of the Muncipalities Act which the Trust has by virtue of this Act power to enforce.'

It is contended that under Sections 65 and 66 the Improvement Act is authorised to frame schemes and to dispose of land by letting it on hire, by teasing, selling, exchanging it or otherwise, disposing of the land vested in it or acquired by it under this Act, It is further argued that in accordance with the rules framed under the Act, which, it is not disputed, have the force of law, the Improvement Trust is authorised to hold auction sales of its land and the settlement of the terms on which the auction sale and their enforcement shall be held are an inseparable incident of the power to auction that land. The condition set out in the auction sale that if the purchaser failed to deposit the 3/4th balance of the sale consideration within ten days from the date of the auction, the advance deposit made by him would be forfeited, was a condition which was settled by the Improvement Trust in its powers under the Act and consequently when Sardar Bahadur Singhar Singh failed to deposit the 3/4th balance the forfeiture of the 1/4th deposit by the Improvement Trust by its resolution was also under the Act. It is therefore contended that Section 97 of the Town Improvement Act applied to the case and the suit of the respondents which was admittedly filed after six months of service of notice was time barred.

9. After hearing the learned counsel for the parties I find myself unable to agree with the contention raised on behalf of the appellant Improvement Trust.

In my opinion the suit of the plaintiff respondents is not governed by the rule of six months limitation provided in Section 97, U. P. Town Improvement Act, but is subject to the rule of 3 years' limitation under the Limitation Act. In my opinion the reduced limitationof six months under Section 97, U. P. Town Improvement Act is intended to cover only cases which arise out of act or acts performed by the Improvement or its employees, particularly mentioned or provided for in the statute itself and not to each and every act which the Improvement Trust may be incidentally called upon to perform in order to discharge its statutory functions. While it is true that the Improvement Trust was acting 'under the Act' in framing the scheme for disposal of its land under Sections 65 and 66 of the Act and its action in holding the auction sale of the land would also fee covered by the words 'under the Act' of Section 97 because the rules made under the Act provide for holding of the auction sales. The Act or the rules made thereunder do not contain any provision for such incidental matters as the exact terms on which the auction of the land may be held, the manner of the enforcement of those terms and the rights and liabilities of the parties arising under those terms. There are matters for settlement purely as a private contract between the Improvement Trust and the auction purchaser and variable be-tween the parties depending upon theexigencies of each case, without reference to the provisions of the Act or the rules. Such incidental functions performed by the Im-provement Trust in the exercise of its statutory authority in conducting auction sale of its land, in my opinion, do not come within the words 'under the Act' used in Section 97, U. P. Town Improvement Act.

The U. P. Town Improvement Act or the rules framed under it do not even suggest, much less do they contain a provision to that effect that the auction purchaser of an Improvement Trust land must deposit 1/4th sale consideration immediately on the acceptance of his bid or that the remaining 3/4th price must be paid within ten days of that date. Similarly there is nothing contained in them to indicate that on failure to pay the remaining 3/4th price within ten days, the auction purchaser runs the risk of forfeiture of his 1/4th deposit at the pleasure of the Improvement Act. These terms had been settled between the Improvement Trust Lucknow and Sardar Bahadur Singhar Singh as between private parties outside the Act though not against it.

10. Referring to case-law on the subject, I may at the very outset observe that except the one case, reported in Lucknow Improvement Trust V. P. L. Jaitly and Co., AIR 1930 Oudh 105, which I will notice shortly, no other decision of any other Court bearing directly on the issue raised before us on the application of Section 97 of the U. P. Town Improvement Act has been cited before us. However, provisions almost identical to Section 97 of the U. P. Town Improvement Act exist in several other statutes which have been the subject matter of decision by various Courts in India and outside and those decisions may be referred to for guidance.

11. Section 273 of the Cantonments Act (Central Act II of 1924) lays down a similar restricted rule of six months limitation as Section 97 of the U. P. Town Improvement Act, The relevant words of this section are very similar to Section 97 of the local Act with only a slight modification. In, the Town Improvement Act, the words used are 'in respect of an act purporting to be done under this Act' whereas in the Cantonments Act at the relevant place the words used are 'any act done or purporting to have been done, in pursuance of this Act or of any rule or bye law made thereunder.' In other respects the two provisions are identical.

Section 273, Sub-sections (1) and (3) of the Cantonments Act came up for discussion before a Bench of this Court in Cantonment Board, Allahabad v. (Firm) Hazari Lal Ganga Prasad : AIR1934All436 which arose out of a suit by a plaintiff for the recovery of price of goods supplied by him to the Board. The Board claimed protection under Section 273, Sub-sections (1) and (3) and pleaded that the suit was beyond. limitation which was admittedly filed after six months. Interpreting the words 'in respect of any act done, or purporting to have been done, in pursuance of this Act or of any rule or bye-rule made thereunder,' his Lordships Sulaiman, C. J., with whom the other learned Judges agreed, observed:

'It seems to me that the plaintiff is not suing the Board for any act done by the Board in pursuance of the Cantonments Act, nor is he suing the Board for any act done by the Board or purporting to have been done by the Board under any rule or bye-law made under the Cantonments Act. The suit is for the recovery of the price of the goods supplied by the plaintiff to the defendant which is still unpaid. The cause of action for the suit is not the action of the Board in omitting to pay the price of the goods, but would ordinarily arise from the fact that goods were supplied by the plaintiff to the Board.'

'No doubt under Section 12, Cantonments Act, a Cantonments Board is empowered to acquire and hold property both movable and immovable and to contract. It is also clear that the purchase made by the Board was by virtue of the power vested in it under the Cantonments Act. But I am unable to regard the suit of the plaintiff against the Board as a suit in respect of an act done by the Board in pursuance of the Act itself as distinct from the act done in the exercise of the power granted to the Board under the Act. In my opinion, Section 273, Sub-section (1) does not contemplate the class of suits of private contracts for which specific rules of limitation are prescribed in Limitation Act. They contemplate actions brought against the Board in respect of acts done in pursuance of the Act itself or done in pursuance of any rule or by-law that has the force of law,''

Section 192 of the U. P. District Boards Act also corresponds to Section 97 of the U. P. Town Improvement Act and restricts the general law of limitation to the class of suits mentioned therein to six months. In this section the relevant words are 'an act done or purporting to have been done in its or his official capacity.'

12. In the case reported in District Board Allahabad v. Lal Behari Lal : AIR1936All18 a suit was brought by a contractor to recover amounts due to him on a private contract with the District Board, Allahabad for supply of certain materials. The suit was admittedly instituted much beyond six months and the claim was resisted on the ground of limitation under Section 192 of the U. P. District Boards Act. It was held by the Full Bench that such a suit would be an ordinary suit governed by the Limitation Act and not by six months' rule provided in Section 192 of the U P. District Boards Act. In that case the argument on behalf of the plaintiff was that the failure of the Board to pay the plaintiff's claim was an omission and did not come within the provision of the word 'act' used in Section 192 of the U. P. District' Boards Act.

Sulaiman, C. J., as then he was, who delivered the leading judgment held:

'There may therefore, ha considerable difficulty in holding that the word 'act' in Section 192, District Boards Act, includes all cases of mere omission to perform a private contract, eventhough not amounting to an illegal omission,within the meaning of Section 4, General ClausesAct.'

At the end the Court held on the apology of the English cases:

'Under the Public Authorities Protection. Act of 1893.......that private contracts, entered into by public authorities would not be 'acts-done in pursuance or execution of any act of Parliament or of any public duty or authority' and applying this analogy their Lordships held that the plaintiff's suit in the case was govern-ed by the ordinary rule of limitation of three years and not the limitation of six. months provided in Section 192 of the District Boards Act.

13. Another provision analogous to, Section 97 Town Improvement Trust Act is Section 326 of the U. P. Municipalities Act: (Act No. II of 1916). In this section the relevant words used are:

'an act done or purporting to have been done in its or his official capacity.' .

This section was also, the subject matter of a decision by a. Bench of High. Court of which one of us was a member in a case reported in Dargahi Lal Nigam v. Cawnpore Municipal Board : AIR1952All385 which arose out of a suit filed by an employee of the Municipal Board, Cawnpore, for recovery of his arrears, of salary. The suit was instituted after service of notice on the Board. Among other defences, the Board resisted the claim by a plea of limitation which was accepted by the trial court and which resulted in the dismissal of his suit. The aggrieved plaintiff went up in revision to the High Court.

The, main controversy raised before the High Court was whether the shorter period of limitation provided in Section 326 of the U. P. Municipalities Act was applicable to suits based On contract also or it applied only to claims arising out of torts against the Municipal Board. After referring to a large number of cases decided under various provisions analogous to Section 326 of the Municipalities Act, their Lordships referred the case to a larger Bench which came up for decision before a Full Bench reported in Dargahi Lal Nigam v. Cawn-pore Municipal Board : AIR1952All382 . While delivering judgment in : AIR1952All385 . for reference to a Full Bench, it was held by one of us that every contract entered into by the Municipal Board or breach thereof would not necessary he an act of omission in pursuance of the Act. It was observed:

'Even if a Board is permitted by the Act to enter into contracts, it may not be said that it entered into a particular contract 'in pursuance of the Act.' Even if it is possible to say this, when it omits to do an act by committing a breach of its obligation under the contract it is not possible to say that it committed the act of omission 'in pursuance of the Act.' It was pointed ont in Sharpington v. Fulham Guardians, (1904) 2 Ch. 449, that although the general duty of a Board make's it intra vires to do so, there is no duty to enter into a particular-contract and that the mere fact that a contract was within the power of true Board does not render the breach of it anything more than a breach of private duty of the individual contractor arising out of the terms of the contract. The Act may require certain duties to be performed by a Board, but does not insist upon those duties being performed through a contractor. The making of a contract by a Board cannot be said to be in pursuance of the Act, though it is certainly within its power. So when a person sued a Cantonment Board for the price of goods supplied to it, his suit was held to be not governed by Section 273 of the Cantonments Act which uses the words 'any act done or purporting to have been done in pursuance of this Act.'

Answering the question whether Section 326 of the Municipalities Act applies only to claims against the Board in respect of suits for torts alone or to claims based on breach of contract also, the Full Bench held that it would apply to both classes of cases and the plaintiff's suit for recovery of arrears of salary from the Municipal Board, Cawnpore, would be governed by Section 326 of the U. P. Municipalities Act.

The question whether the limitation provided in Section 326 U. P. Municipalities Act applied only to suits instituted upon an act of the Municipal Board specifically provided for by the Act itself or also to actions based upon other acts for which the statute made no provision but were incidental to the act or acts clearly provided for in the Act was not raised before the Full Bench nor decided, hence this Full Bench decision is not of much help in answering the question referred to us.

14. aS stated by me above, the case re-ported in AIR 1930 Oudh 105 is the only case which has been cited before us and which related to the interpretation of Section 97, Sub-sections (1) and (3) of the U. P. Town Improvement Act. The case arose out of an agreement entered into by the plaintiff with the Improvement Trust, Lucknow, to carry out work of electric installation and fitting in a building owned by the Trust. In this case also the suit was defended on the ground of limitation.

Repelling the defence of the Trust the Bench of the late Chief Court Oudh held:

'The question for decision therefore is as to whether the agreement entered into by the Lucknow Improvement Trust and on which the present suit is founded was an act purporting to be done under the Town Improvement Act. Clearly it would be such .an act if we could discover any provision in the Act authorising the Trust to enter into contracts in their character as such and of the nature of the present contract. The learned counsel on both sides and we endeavoured in vain to find any such provision within the four corners of this Act; whether the omission is deliberate or accidental, is a matter with which we as a Court of law are not concerned. The result is that it cannot be held that the entering into the agreement which constitutes the main element of the plaintiffs' cause of action was an act which was 'done un-der this Act.'' This being so, the general law of limitation applies and it is agreed that the suit is in time within that law.'

15. A similar view was taken by a Full Bench consisting of five Judges of the Bombay High Court in Manohar Ganesh Tambekar v. Dakor Municipality, ILR 22 Bom 289 (FB) in which the interpretation of Section 48 of the Bombay District Municipal Act (II of 1884) was involved. Section 48 of the said Act makes notice compulsory before the institution of an action against the Municipal Board for 'anything done, or purporting to have been done, in pursuance of the Bombay District Municipal Act (II of 1884).' The Municipality of Dakor had taken possession of a part of Gomti land for building a Dharmshala believing that it vested in it under the provisions of Section 17 of the Bombay District Municipal Act.

The plaintiff sued the Dakor Municipality for ejectment from the land asserting title in himself. The claim was resisted on the ground that it was bad for want of notice under Section 48 of the Bombay District Municipal Act, His Lordship Farran, C. J. observed;

'Reading the Section (48) as a whole, I am of opinion that upon the natural construc tion of its language it does not include actions in ejectment. I do not think that an action for the possession of land can be said to be an action for anything done or purporting to have been done in pursuance of the Act. An action of ejectment is based on title, and has no reference, except for limitation purposes, to the time when, or the means by which, the defendants obtained possession of the land sued fr. The right of the plaintiff to sue is complete when he can show that the defendant is in possession of land belonging to him. He need not go further and allege the means by which the defendant acquired it. Whether these means were lawful or unlawful, is quite immaterial (so long as they do not convey title) in so far as the plaintiff's right to sue is concerned. If this is the correct mode of viewing the nature of an action of ejectment, and I think that it is, I fail to see now such an action can be said to be an action for something done in pursuance of the Act when a Municipality is the defendant, and for that reason I consider that it does not fall within the wording of the section.

In the same case another learned Judge, Parsons, J., observed:

''There are, for instance, sections of the Act which give a Municipality power to remove what it considers to be obstructions or encroachments. If a suit were brought against it for possession of the land it may have taken possession of when putting in force the provisions of those sections, it could justly plead in such a suit that its action was done or purported to be done in pursuance of the Article Where, however, as in the present case, there is no action or assumption of action under any section of the Act, but the Municipality have taken possession of landclaiming it as its own property, Section 48 cannot, in my opinion, be held applicable.'

The third learned Judge, Ranacle, J., agreeing with the opinion of the two learned Judges observed:

'Claims for the specific performance of a contract to sell or lease land will not, therefore, fall within the section. Where the claim of the Municipality is based on a private right, the plaintiff who may be injured by the exercise of that right, can sue without giving previous notice just as he might sue any other individual . . . But if he sues to recover possession of the land, the application of the section will depend upon the fact whether the dispossession was the result of any act of the Municipality done by it in the exercise of its statutory powers. In that case, Section 48 will govern the case as laid down in Nagusha v. Municipality of Shola-pur, ILR 18 Bom 19. If it had no such connection and the Municipality claimed under a private title, then no notice would be necessary. Kashinath v. Gangabai, ILR 22 Bom 283. In other words, the true test is not so much the nature of the suit or of the subject-matter, but whether the cause of action was or was not connected with the exercise of the statutory powers conferred on the Municipality.................My answer to the question is thus that Section 48 does not generally apply to suits for the possession of land except in those cases where the claim arises on account of some act or omis-sion ordered by the Municipality in the exercise of its statutory powers.'

The other two learned Judges also concurred in these opinions.

16. In District Local Board of Poona v. Vishnu Raghoba, AIR 1933 Bom 164, a Bench of the Bombay High Court had to consider the effect of Section 136 of the Bombay Local Boards Act, 1923 in a suit brought by a plaintiff against the District Local Board of Poona for recovery of money as damages for breach of a contract in connnection with the construction of a building. The District Local Board, Poona, contested the suit on the ground that it was beyond time under Section 136 of the Bombay Local Boards Act, 1923.

Section 136 of the Bombay Local Boards Act reads:

'No suit shall be commenced against any Local Board, or against any officer or servant of a Local Board, or any person acting under the orders of a Local Board, for anything done, or purporting to have been done, in pursuance of this Act, without giving to such Local Board, Officer, servant, or person one month's previous notice in writing of the intended action and of the cause thereof, nor after three months from the date of the act complained of.'

Admittedly, the suit was commenced more than three months after the act on which the cause of action was based. After considering a large number of cases, both Indian and foreign, bearing on the subject their Lordships observed:

'It is the obligatory duty of the Local Boards under Section 50, Clause (b), Bombay Act 6 of1923, to make adequate provisions in regard to the construction and repair of public buildings, and under Section 45, Sub-section (2) all works other than those to be executed by the Government Executive Engineer under Sub-section (1) of the section shall fee executed by such agency and subject to such supervision as the local Board at whose cost any such work is to be executed thinks fit. There is no provision in the Act, making it obligatory to execute the construction of a building through a contractor, or indicating that the execution of the construction of a building through a contractor was a performance of its statutory duties. The work could have been executed by the Government Executive Engineer if the Local Board has communicated a desire to that effect. The complaint in the present case is by a private individual in respect of private injury done to him by breach of the contract. The question of public duty arises only in a remote way inasmuch as but for such public duty any such contract would be ultra vires. The performance of the contract is only incidental to the statutory powers of the Local Board. We think therefore that the consensus of authority is In favour of the view that an action based upon a breach of contract would not fall within the ambit of Section 136, Bombay Local Boards Act of 1923.'

In this view of the matter their Lordships repelled the contention of the District Municipal Board, Poona, that the plaintiff's suit Was hit by the limitation of three months provided in Section 136 of tbe Bombay Local Boards Act.

17. In another case reported in Municipal Borough, Ahmedabad v. Jayantilal Chhotelal, AIR 1948 Bom 98, the following question was referred for answer to the Full Bench:

'When a municipality has obtained powers from a Municipal Act to enter into a contract, is the exercise of their power to enforce the contract an act done in pursuance of the Municipal Act?'

The case arose under Section 206, Bombay Municipal Boroughs Act, (XVIII of 1925) which ran:

'No person shall commence any suit against any municipality or against any officer or servant of a municipality or any person acting under the orders of a municipality for anything done or purporting to have been done in pursuance of this Act, without giving to such, municipality, officer, servant, or person two months' previous notice in writing of the intended suit and of the cause thereof, nor after six months from the date of tile act complained of.''

After considering the various Indian and foreign authorities on the subject by analogy, their Lordships answered the question as below:

'Therefore, if the section applied, the plaintiff's claim was clearly out of time. In order to place a proper construction on Section 206, first thing to bear in mind is that it constitutes a restriction on the ordinary rights of litigants and therefore, it must be strictly construed. Only those suits fall within the ambit of the section which are in respect of anything done, or purporting to have been done, by the municipality in pursuance of the Act. The key words are 'in pursuance of the Act' and the whole controversy has arisen as to the true meaning and effect of that expression. In this case the plaintiff's contention is that the act of the municipality in forfeiting the deposit is wrongful and it is in respect of that wrongful act of the municipality that the suit has been brought. Can it be said that forfeiting the deposit is done by the municipality in pursuance of the Act? It is only if the municipality has forfeited this deposit purporting to act under a power given to it by the statute that it could be said that the plaintiffs claim comes within the section. Under Section 68(1) (e) of the Act one of the duties east upon the municipality is the duty of cleansing public streets and under Section 48(1) of the same Act the municipality is empowered to enter into and perform all contracts which may be necessary or expedient in order to carry into effect the provisions and purposes of the Act. Therefore it is clear that while a statutory duty is cast upon the municipality to cleanse the public streets, there is no such duty cast upon it to enter into any contract. It may or may not enter into a contract in order to discharge its duty and no individual could require the municipality to enter into a contract with him. What the plaintiff was seeking to litigate in his suit was his private rights which came into existence as a result of the contract entered into between him and the municipality. He was not seeking to enforce a public duty oast upon the municipality by the statute, and even the defence of the municipality was not that it was forfeiting the de-posit in pursuance of the powers given to it under the contract. Therefore, while the plaintiff was seeking to enforce his rights under the contract, the municipality was defending that suit on the ground that it was exercising its rights to enforce the contract according to the construction placed by it on the 'contract. Apart from any authority, it seems to us difficult to hold that a suit to enforce the rights of a private individual under a contract entered into with the municipality which the Municipality was not under any statutory obligation to enter Into can fall within the ambit of the section.'

18. Looking to the various authorities noted above, it appears that the Legislature in reducing the time limit for the institution of suits against the municipal bodies, had in its view a particular class of eases and not all and every kind of action which a party may commence against a municipal body. The class of actions to which this reduced limitation was intended to apply would be those which have been performed by the municipal body in performance of acts which are specifically and clearly provided for in the Act itself and not to acts which are incidental to those statutory acts.

This is clear from a reading of Section 97 U. P. Town Improvement Act also. The Improvement Trust is a corporate body and is a creation of the statute. It does not perform any act except in accordance with its statutory existence. If it was intended to apply the six months'limitation to all suits instituted against the Improvement Trust for acts done by it, there was no necessity for inserting the words 'in respect of an act purporting to be done under this Act.'

19. The view expressed by us above also finds support from a decision reported in Bradford Corporation v. Myers (1916) 1 AC 242, and which has been referred to and relied on by the Indian High Courts in several cases noted above. The case related to the application of the reduced period of limitation under Section 1 of the Public Authorities Protection Act which is almost similar to Section 97, U. P. Town Improvement Trust Act.

Their Lordships of the Privy Council held :

''The defendants, a municipal corporation, were authorised by Act of Parliament to carry on the undertaking of a gag company and were bound to supply gas to the inhabitants of the district, and they were also empowered to sell the coke produced in the manufacture of the gas. The defendants contracted to sell and deliver a ton of coke to the plaintiff, and by the negligence of their agent the cke was shot through the plaintiff's shop window.' More than six months afterwards the plaintiff commenced an action of negligence against the defendants. The defendants pleaded Section 1 of the Public Authorities Protection Act, 1893, as a bar to the action:

Held, that the act complained of was not an act done in the direct execution of a statute, or in the discharge of a public duty or the exercise of a public authority and that the Public Authorities Protection Act, 1893, afforded no defence to the action.'

Supporting the decision Viscount Haldane, J., observed:

''For it seems to me that the language of Section 1 does not extend to an act which is done merely incidentally and in the sense that it is the direct result, not of the public duty or authority as such, but of some contract which it may he that such duty or authority put it into the power of a public body to make, but which it need not have made at all.'

Amplifying the principle further another noble Lord, Lord Shaw of Dunfermline, J., in the same Judgment observed.

'There are many things which a public authority, clothed, say, with statutory power, may do which the limitation will not cover, but when the act or neglect had reference to the execution of their public duty or authority --something founded truly on their statutory powers or their public position--to that, and that only, will the limitation apply.'

The learned Judge further supported his view by quoting an observation of Vaughan Williams L. J. made in another case:

''Now I do not think that it can have been, the intention of the Legislature that every act done by the corporation which was intra vires conferred by this Order should be subject to the protection afforded by this Act. In my judgment an act which is done, not only in pur-suance or execution, or intended execution, of this Light Kailways Order, but also in pursuance or execution, or intended execution, ofsome obligation incurred by a public authority voluntarily beyond the; obligation cast upon them by the Order, is not an act done in pursuance or execution, or intended execution, of the Order. In the first place, I doubt very much whether an act done by virtue of, and in compliance with, an express contract to do that act is done in pursuance or execution, or intended execution of the Order merely because the making of the Contract only became intra vires by reason of the passing of the order.'

Lord Shaw of Dunfermline, J., who was also a party to that judgment supporting the principle laid clown above, observed;

'The limitation of actions under the Public Authorities Protection Act covers 'any actdone in pursuance, or execution, or intended execution of any Act of Parliament, or of any public duty or authority, or in respect of any alleged neglect or default in the execution of any such Act, duty, or authority.'

The pinch of this case, Mr. McCall has cogently urged, lies in the word ''authority'. Granted that the respondents had not a statutory duty to sell coke, still they had 'authority' to do so,and what is here complained of is neglect in doing a thing which is authorised by statute.

I think the appellants' counsel were justified in attaching weight to this word, and that it does extend the ambit of the limitation. But there is another word in the section which must not be left out of view. It i.s not enough that the neglect occurs in the doing of a thing which is authorised by statute, but the thing done is not every or anything done but must be something in the execution of a public duty or authority, and it is only neglect in the execution of any such duty or authority that is covered by the statute. This restriction appears to me to be vital. The Act seems to say there are many things which a public authority, clothed, say, with statutory power, may do, which the limitation will not cover but when the act or neglect had reference to the execution of their public duty or authority -- something found truly on their statutory powers or their public position, to that, and that only, will the limitation apply. I gather that this is the view taken by my noble and learned friend on the Woolsack, and while I concur in his views as a whole, I express my pointed agreement with him on this head.'

20. In another case (1904) 2 Ch. 449 also the view expressed by me finds complete support. It was a case which related to an action for recovery of money against a local body for breach of contract in respect of a building. Repelling the contention that Section I of the Public Authorities Protection Act applied, it was held that the local authority had power to build houses for the reception of the destitute, but the building contract given by the authority made under that power was not in itself an act done in pursuance, or execution, or intended execution of an Act of Parliament.

21. In view of the discussion, held above, I am of opinion that while there can be no doubt that the Improvement Trust, Lucknow,. would be deemed to be acting 'under the Act' within the meaning of Section 97 U. P. Town Improvement Act, in so far as its acts relate to the framing of the scheme of the land or holding its auction sale are concerned, the incidental act of the Improvement Trust in setting the exact terms of the auction sale such as deposit of the 1/4th of the sale consideration by the auction purchaser on the fall of the hammer, the obligation upon him, to deposit the 3/4th balance within ten days and again the right of the Improvement Trust to forfeit 1/4th advance deposit in the event of the auction purchaser's failure to deposit the 3/4th balance within ten days, is not covered by these words of the Act because the Act or rules made thereunder do not make any provision for such latter act and it is a matter for private settlement between the Improvement Trust and the auction purchaser according as necessary in each case without reference to the Act or the rules. In my opinion, therefore, a suit for the refund of money, forfeited by the Improvement Trust bas-ed upon an alleged breach of the conditions of the auction sale by the auction purchaser is not governed by the rule of limitation provided in Section 97, U. P. Town Improvement Act, but by the ordinary period of three years' limitation under the Indian Limitation Act.

22. My answer to question raised before the Bench is in the negative.

Desai, C.J.

23. I concur in the answer given by our brother Misra to the question. The only act or acts done by the Trust which give rise to the cause of action on which the suit was brought by the respondents against the appellant Trust are (1) receiving the deposit and (2) forfeiting it. If the suit is deemed to be one for money had and received, only the former act was sufficient to give a cause of action to the respondents, but even if both the acts are held to be parts of the cause of action, on which the suit was instituted against it, it does not matter because the two acts stand on the same footing with regard to the question whether the act purports to have been done by the trust under the Act or not. If the former act is an act purporting to be done by it under the Act, the second also would be such an act, and if it is not, the second also would not

24. I agree with my learned brother that an act done by the Trust under the Act is an act expressly or specifically required or permitted to be done by it by the Act; no act, which is not referred to in the Act, can be said to be an act done under it. If a contract is required or permitted to he entered into by the Act, the act of entering into a contract is an act done under the Act, but an act done in exercise of a power conferred by the contract itself cannot be said to be such an act. The contract entered into by the Trust with the respondents is not the subject-matter of the suit; the respondents do not challenge the existence or the validity or legality Or effect of it. The acts done by the Trust may be acts doneunder the contract but would not be acts donewilder the Act simply because the contract wasentered into in exercise of a power conferred bythe Act. The distinction between an act done in the direct execution of a statutory provision and an act done under a contract, even it required or permitted to be entered into by a statutory provision, was emphasized by the House of Lords in the case of Bradford Corporation v. Myers and By a Full Bench of the Bombay High Court in the case of Municipal Borough of Ahmedabad, referred to by our learned brother.

25. A statute generally requires or permits positive acts to be done and, therefore, usually it would be a positive act that amounts to an act done under the Act. A negative act or omission cannot amount to an act done under an Act unless it expressly enjoins or permits the non-doing or Omission. The non-payment of the deposit will not be an act done under the Act, unless it expressly enjoined or permitted it.

26. There is no provision in the Town Improvement Act requiring or permitting a Trust toreceive a deposit from a bidder at an auction and requiring or permitting it to forfeit it in certain conditions. Consequently neither of the two actsdone by the Trust could be said to be an act done by it under the Act. The only act that could be said to have been done by it under the Act isthat of holding the auction, but the suit is not in respect of this act; the holding of the auction is not even an ingredient of the cause of action on which it was filed.

Nigam, J.

27.-29. (After stating the facts, his Lordship continued) :

The case of contract has not been raised before us and it is conceded that the correct view of the law now is that the section applies to all suits covered by it even if they are based on a contract. This view is based on the Privy Council decision in the case of Revati Mohan Das v. Jatindra Mohan Ghosh . There at page 97 column 2 of the report their Lordships stated :

''The learned Subordinate Judge held that the section had no application to suits in contract, and this dictum was rightly repelled by Mukerji, J., who delivered the judgment of the High Court. Having regard to the decision of this Board in Bhagchand v. Secy. of State , their Lordships think that no such distinction is possible. The learned High Court Judges, how-ever, seem to have regarded the suit as based on a breach of contract which they thought would be an ''Act' within the contemplation of the section. Their Lordships do not suggest that a claim based upon a breach of contract by a public officer may not in many cases be sufficient to entitle him to notice under the section, but they are unable for the reasons already given, to agree with the learned Judges that the omission by respondent 1 to pay off the mortgage was such a breach.' It is, therefore, not necessary for me to discuss in detail the view taken in AIR 1933 Bom 164, Municipal Committee of Moradabad v. Chatri Singh, ULR 1 All 269, Manni Kassundhan v. Crooks, ILR2 All 296, Brij Mohan Singh v. Collector of Allahabad, ILR. 4 All 339 (FB) and Municipal Board, Agra v. Ram Kishan : AIR1933All785 . It was also pointed out by My Lord the Chief Justice in the referring order in the case of : AIR1952All385 :

'It is true that tne applicants' suit, is based on a contract of service, lie is entitled to whatever is due to him under the contract of service. But the words of Section 326(3) are wide enough to cover every cause of action regardless of its nature. There are no words in the sub-section to suggest that it applies only to a suit based on a tortuous act'. Then again after pointing out that this Court had applied Section 320 of the U. P. Municipalities Act to cases of contract My Lord the Chief Justice stated in paragraph 13:

'The view that Section 326 applies to a suit based on tort and not on contract seems to be a legacy of the old days when the corresponding provision in the Municipal Act contained the words 'for anything done or purporting to be clone in pursuance of the Act,' That was a case in which

'The making of a contract by a Board cannot be said to be in pursuance of the Act, though it is certainly within its power..... .The Full Benchobserved that it was no part of the Board's duty to enter into any contract, With respect to the learned Judges I consider that those cases were correctly decided.' The judgment of the Full Bench case was delivered by Malik, C. J. in the case of : AIR1952All382 and then it was stated;

'The argument is that Section 326, Municipalities Act applies to cases of torts and not to cases of contract and the Board was under no obligation under the Municipalities Act to appoint the plaintiff or to pay his full salary so that if no payment was made there was no breach of any statutory obligation but a breach merely of a contractual liability.' This is, in my opinion, sufficient to reject the contention that suits based on a contract or breach thereof cannot be covered by the terms of Section 97 of U. P. Act VIII of 1919. This argument has not been urged before us and it is not necessary for me to consider it in any further detail.

30. Section 97 of the Town Improvement Act, so far as it is relevant for our purposes, reads:

'97(1) No suit shall be instituted against the Trust......in respect of an act purporting to bedone under this Act, until the expiration of two months next after notice in writing has been, in the case of a Trust left at its office.... explicitlystating the cause of action. .... .and the plaintshall contain a statement that such notice has been so delivered or left.

(2)....................;. (3) No action such as is described in subsection shall, unless it is an action for the recovery of immovable property or for a declaration of title thereto, be commenced otherwise than within six months next after accrual of the cause of action.

(4) Provided that nothing in Sub-section (1) shall be construed to apply to a suit wherein theonly relief claimed is an injunction of which the object would be defeated by the giving of the notice or the postponement of the commencement of the suit or proceeding.'

There are similar provisions in other Acts but there is some difference in the language used. Section 326 of the U. P. Municipalities Act uses the words :

''In respect of an act done or purporting to have been done in its or his official capacity.'

Section 192 of the District Boards Act (Act X of 1922) also uses the same phrase. Section 273 of the Cantonments Act (Act II of 1924) uses the phrase 'in respect of any act done, or purporting to have been done, in pursuance of this Act or of any rule or bye-law made thereunder.' Section 80, which came up before the Privy Council in the case of , also uses the words ''in respect of any aet purporting to be done ........ in ...... official capacity.' The U. P.Nagar Mahapalika Act (Act II of 1959) in S, 571: (1) reverts to the phraseology used in the English Act, Public Authorities Protection Act, 1893 and uses the phrase 'in respect of any act done or purported to be done in pursuance or execution or intended execution of this Act or in respect of any alleged neglect or. default in the execution of this Act.' It has been suggested that the phraseology used makes a substantial difference. In fact in the referring order in the case of : AIR1952All382 , my Lord the Chief Justice was of opinion :

'I am strongly inclined to the view that there is a material difference between the two sets of words.'

I have carefully considered the question and I consider it really a misfortune that I have been unable to persuade myself to follow the view expressed on the basis of the difference in the phraseology used. It appears to me that the intention throughout is that a notice should be necessary in respect of all acts done in the official capacity by the Board of any of the servants of the Board (or the Trust) or purporting to act in the discharge of its official functions. It cannot be suggested that the earlier phraseology used in the Cantonments Act or the earlier Municipalities Act has been dropped in favour of the words 'official act' or 'official capacity'' because that phraseology was found to be inadequate.

It may be pointed out that the words used in Act II of 1959 are a throw back to the language of the English Act, 1893. It appears to me that the intention throughout has been to cover all official acts.

31. My reason for this view is to be found in the provisions of the later sub-clauses of the section itself. Sub-section (2) deals with tender of sufficient amends to the plaintiff. Now whatever may be the cause of action whether it is a breach of contract, an invasion of rights in immovable property or even commission of a nuisance. It is possible to make amends and the whole intention of giving a notice under Section 97 (1) appears to be to afford an opportunity to the Trust to avoid litiga-tion and in cases where any mistake has been committed by the Board to allow it an opportunity of tendering sufficient amends to the plaintiff.

This sub-section also directs that in case sufficient amends are offered, the plaintiff shall be debarred from recovering any sum in excess and shall pay all costs incurred by the defendant after such tender. The intention of providing a notice under Section 97 (1), therefore appears to me to allow the defendant Trust to make amends. Now the question of making amends would, in my opinion, arise in all acts done in official capacity. The very put-pose of the section would, in my opinion, be defeated if in respect of some acts done in the official capacity a notice need not be given. It appears to me that the question of limitation here need not be taken into consideration.

The purpose of the section appears to me to be to afford the defendant Trust or the defendant Board an opportunity to avoid litigation in case it finds that it has done something which it could not have done. Thus any interpretation of the words used in Section 97 (1) limiting it to acts which are required to be done under the provisions of U. P. Act VIII of 191.9 alone would to a great extent defeat the very purpose of the notice prescribed in Section 97 (1) of the Act.

32. Further it appears to me that the provisions of Sub-sections (3) and (4) also go to support my view. I may be wrong but that is what appears to me. Sub-section (3) provides that no action, unless it is an action for the recovery of immovable property or for a declaration of title thereto, shall be commenced otherwise than within six months next after accrual of the cause of action, The intention is clearly to enforce liabilities of the Board against it within a short time so as not to dislocate future budgets.

It appears to me that the terms of Sub-section (I) must be interpreted in a manner to cover suits for recovery of immovable property or for a declaration of title thereto. Sub-section (4) provides that no notice is necessary where the relief claimed is merely that of an injunction and the very purpose of the suit would be defeated if the plaintiff was required to give notice or restrained from filing a suit for about two months. It is, therefore, clear that, but for this proviso contained in Sub-section (4), Section 97 must be interpreted to cover suits claiming the relief of injunction also.

33. Thus in interpreting the phrase 'in respect of an act purporting to be done under this Act' it is necessary to give the phrase a meaning that would cover suits for recovery of immovable property or a declaration of title thereto and even suits for injunction and perhaps also suits in which some financial liability is to be enforced against the Board, Now it appears to me that suite for recovery of immovable property may be based on a wrong assertion by the plaintiff of his title or on improper encroachment by the defendant Board or Trust on the plaintiff's property. It does not appear to me that it can be said that no notice is necessary in the latter case and yet it could not be suggested that encroachment on any land is an act done in pursuance of the Act. Similarly I do notthink that the commission of a nuisance or tort can be suggested to be an act purporting to be done under this Act. It, therefore, appears to me that the phrase 'in respect of an act purporting to be done under this Act' must be interpreted in a Manner to cover all official acts and was intended by the Legislature to be so.

34. In the case of (1004) 2 Ch 449, Farwell. J. stated:

'Public authorities now perform many functions which compel them to enter into all sorts of contracts; but this is the first time it has been suggested that on any construction the Act could apply to contracts of this nature. The defendants' counsel had not the courage to follow their argument to its logical conclusion and say that every contract entered into by a public body is within the Act. But the very contract entered into by a public body is necessarily in a sense entered into in discharge of a public duty or under statutory authority for otherwise it would be ultra vires. And I think it would necessarily follow, if I decided in the defendants' favour, that every contract entered into by a public authority is an act done in pursuance of a public duty or authority and therefore is one to which the Act applies. I do not see where to draw the line.'

Then the learned Judge stated :

'The public duty which is here cast upon the guardians is to supply a receiving house for poor children ........ In order to carry out this dutythey have power to build a house or alter a house, and they accordingly entered into a private contract. It is a breach of this private contract that is complained of in this action ........ The onlyway in which the public duty comes in at all is, as I have pointed out, that if it were not for the public duly any such contract would be ultra vires. But that would apply to every contract. I cannot find any ground for saying that this particular con-tract comes within the Act. I think it is clear that what is complained of is a breach of a private duty of the guardians to a private individual.'

This view is certainly against the view taken by me but, as I will paint out later, it is not applicable to the facts of the present case as the present contract Was entered into directly in the performance of a statutory duty.

35. The word 'purport' has been considered by the Supreme Court in the case of Azimunnissa v. The Deputy Custodian, Evacuee Properties, District Deoria : [1961]2SCR91 . Then in paragraph 20 of the judgment it was stated :

'The word ''purport'' has many shades of meaning. It means fictitious, what appears on the face of the instrument; the apparent and not the legal import and therefore any act which purports to be done in exercise of a power is to be deemed to be done within that power notwithstanding that the power is not exercisable; Dicker v. Angerstein, 8 Ch D 600 at p. 603. Purporting is therefore indicative of what appears on the face of it or is apparent even though in law it may not be so.'

The correctness of this view has not Keen challenged and it could not be challenged. It is,therefore, the action of the defendant which must be scrutinised. It is his attitude which is the material point in determining whether he did purport to act under the powers, conferred on him under the Act or not. The manner in which the defendant proceeded to forfeit the amount and reject the bid is indicated by letter Ext. A18 dated 4th May, 1948. The matter was considered in a Trust Resolution and the decision arrived at was communicated to plaintiff No. 1 by Ext. A18 under the signature of the Chairman, Lucknow Improvement Trust.

It is true that the letter mentions the words 'according to the condition of auction'. But that, in my opinion, makes no difference. It has been pointed out by the learned counsel for the Trust that the Trust proceeded in its official capacity and there is no allegation of any lack of bona fidest The only question is as to whether the Trust was acting in terms of the contract Or in pursuance of its statutory rights and duties. I have already indicated earlier that all official acts appear to me to be covered by the phrase used in Section 97 (1) of U. P. Act VIII of 1919. I would, therefore, answer the question reframed by this Bench in the affirmative.

36. However, I proceed to consider the matter further even on the restricted meaning that the provisions of Section 97 (1) could apply only to actsdirected hv the Act. Section 2 (7) of U. P. Act VIII of 1919 states:

'All references to anything done, required authorised, permitted ........ shall include anything done required, authorised ........ permitted

(a) by any provision of this Act; or

(b) by any rule or scheme made under the provisions of this Act ..........

Section 23 provides for the framing of Improvement schemes and Section 24 indicates the types of the improvement schemes. It is not contested before us that the Naka Hindola Scheme was one of the schemes that the Town Improvement Trust is authorised under the law to frame. The rules framed by the Government under Section 72 read with Section 65 of the Town Improvement Act. 1919 and notified under notification No. 1463/XVI(P.M.)-16-I.T. 42 dated October 9, 1944 as amended by notification No. 3001/XI B-161-I.T.-42 dated September 19. 1949 are printed at page 150 of the Improvement Trust Manual U. P. Rule 3 reads;

'3 (a) All lands to be sold shall be put to auction.

(b) In the case of leases, the premium shall bf put to auction and not the annual rent ........' Clause (c) need not be referred to. It is thus clear that the Trust was required by the rules, which must be deemed to be part of the statute, to auction the premium to be paid for the grant of the lease of the two plots in suit. This was a statutory obligation laid on the Trust.

In the case of (1916) 1 AC 242, Lord Buck-master L. C. stated :

'In other words, it is not because the act out of which an action arises is within their power thata public authority. enjoy the benefit of the statute.It is because the act is one which is either an act inthe direct execution of a statute, or in the dischargeof a public duty, or the exercise of a publicauthority.'

Viscount Haldane referred to the decision in thecase of (1904) 2 Ch 449 (Supra) and stated :

'For it seems to me that the language of S. Idoes not extend to an act which is done merely incidentally and in the sense that it is the direct)result, not of the public duty or authority as such,out of some contract which it may be that suchduty or authority put it into the power of a public body to make, but which it need not have madeat all'.

Again Lord Atkinson stated :

''Here an obligation is by statute cast upon theappellants to supply gas, but there is no provision in any of the Acts to which the House has been referred imposing expressly a like obligation in reference to any of the by-products of their manufacture.''

Lord Shaw stated:

'Similarly when a municipality, by virtue ofprivate and public statutes, carries on a gas under-taking, the public duty of manufacture and supply finds its correlative in the right of the consumer,a public right which he has in common with all his fellow householders to supply and to service, Inboth of these cases accordingly the Public Authorities Protection Act applies.

But where the right of the individual cannotbe correlated with a statutory or public duty to the individual, the foundation of the relations of theparties does not lie in anything but a private bargainWhich it was open for either the municipality or the individual citizen, consumer, or cUs.omer to enter into or to decline.'

37. It appears to me that in the present case it was incumbent on the Trust to sell the premium by auction and the other things follow incidentally. In the case of McManus v. Bowes, (1937) 3 All ER 227, Slesser L. J. stated :

'In other words, if the only connection between the employment of Dr. McManus and the statute 'had been that the Local authority would have to point to the statute as an enabling statute to give it power to make contracts with doctors on such terms as it thought fit, then I think that it might well be argued that, this being an act which is notOnly within its power, but also an act in which it is free to make such contracts as it thinks fit, the case would be like the sale of the coal products in (1916) 1 AC 242 (supra) and the Public Authorities Protection Act would not apply. Similarly, in (1904) 2 Ch 449 (supra) where a loca1 authority had power to build houses for the reception of the destitute, it was held that a building contract made Under power was not in itself an act done in pursuance, Or execution, or intended execution, of an Act of Parliament. If the true view be that this appointment and removal are directly statutory, not by reason of any contract but by reason of the operative language of the section itsef, as I think is the case with such an office as this, where the officer holds office during pleasure, then I thinkthat it follows that such a case is not a contract ofthe voluntary nature suggested in (1916) 1 AC 242(supra), or in Sharpington's case, (1904) 2 Ch 449, (supra) or in several cases which are there discussed, but is a direct execution of the statute itself.

It Has, However, been argued before us that though the holding of the auction was compulsory under the statute, it was not necessary for the Trust to lay down the terms of the particular contract and this was a voluntary action on its part and therefore this is a contract under the enabling powers conferred on the Trust and not a performance of its statutory obligations. In the case of Messrs. Universal Imports Agency v. Chief Controller of Imports and Exports : [1961]1SCR305 it was laid down that a purchase by import involved a series of integrated activities commencing from the contract of purchase with a foreign firm and ending with the bringing of the goods into the importing country and the purchase and resultant import formed parts of a same transaction. I would similarly hold that the acceptance of the bids and the rejection of bids as also acceptance of the deposit and its forfeiture are parts of the same transaction as that of the holding of the auction and the whole thing forms an integrated whole and that the holding of the auction is itself the performance of a statutory obligation.

In the case of Athimannil Muhammad v. Mala-bar District Board, AIR 1935 Mad 213, it was held that what the President at representing the Boards does in connection with the leasing out of the right to levy tolls is undoubtedly an act done, in, execution of his powers or duties under the Act. Where a contractor, whose acceptance of tender has been cancelled by the President on the ground that there is another higher tender by some other person, files a suit for damages for such alleged improper cancellation of his tender which has been accepted but beyond six months from date of cancellation Section 225 (1) (3) applies and the suit must fail.

The decision in the case of AIR 1930 Oudh, 105 is clearly distinguishable. That was a contract which was voluntarily entered into and was not necessary for the performance of statutory obligation. The decision in Abdul Ghafoor Khan v. Luck-now Improvement Trust. AIR 1933 Oudh 420 does not give any reason for it. The Full Bench case of AIR 1948 Bom, 98 (FB) supports my views to some extent. It is stated therein:

'The act done must be the direct result of some duty cast upon the local body or some authority conferred upon it.'

The decision in : AIR1934All436 is distinguishable as there the cause of action was based On the date of the supply of the materials. It was held in : AIR1936All18 , that the act done was not in execution of its statutory duty.

The Full Bench case of : AIR1952All382 (supra) was a case under the Municipalities Act in which the relevant words were 'act purporting to he done in official capacity.' In the referring rider. it was pointed out by my Lord the Chief Justice that a contract of service entered into by a Board in compliance with a statutory requirement cannot be said to be a private contract. It was not argued that while employment of servants was a statutory requirement the contract with the individual employee was a private contract

Similarly I hold that it was obligatory on the Improvement Trust to hold the auction. The holding of the auction must necessarily include the obligation of accepting and rejecting bids of, executing sale deeds or leases or refusing to do so, of accepting the price or part thereof and must necessarily includes the question of refusal to refund the amount paid or part thereof. If in the present case even without the contract the price or part of the price had been paid to the Trust and the Trust had later refused both to execute the lease and to refund the money, that action would be part of its obligation to hold the auction and that action would he covered by the discharge of its obligation to hold an auction for the sale of the premium due on the tease. Thus even if there was a contract it does not really come into the picture and the Board's refusal to refund the money is clearly in discharge of its obligation to hold an auction tor the sale of the premium on the lease and is therefore in respect of an act purporting to be done under this Act. I would, therefore, answer the question as framed by this Bench in the, affirmative.

38. The learned counsel for the respondents has also referred vis to the case of John v. Dodweli and Co. Ltd., AIR 1918 PC 241. It does not ap-pear to me that that decision has any relevancy to the facts of the present case.

39. I would, therefore, answer the question as reframed by this Bench in the affirmative.

BY THE COURT

40. We hold that a suit by a bidder at an auction held by the Lucknow Improvement Trust for selling land in connection with a scheme framed by it under the Town Improvement Trust Act, for refund of one-fourth price deposited by him on his bid being accepted, but which was subsequently forfeited by the Trust on account of his failure to pay the balance within the prescribed time, is not a suit in respect of an act purporting to be done by the Trust under the Act.

41. Let the record be placed before thebench concerned with this answer.


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