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Mahabir Jute Mills Vs. Firm Kedar Nath Ram Bharose - Court Judgment

LegalCrystal Citation
SubjectContract
CourtAllahabad High Court
Decided On
Case NumberFirst Appeal No. 135 of 1949
Judge
Reported inAIR1960All254
ActsSpecific Relief Act, 1877 - Sections 42
AppellantMahabir Jute Mills
RespondentFirm Kedar Nath Ram Bharose
Appellant AdvocateC.S. Saran, Adv.
Respondent AdvocateJagdish Swarup and ;Hari Swarup, Advs.
DispositionAppeal dismissed
Excerpt:
contract - declaration regarding contract - section 42 of specific relief act, 1877 - suit under section 42 relates to declarations regarding the legal rights of applicant - cannot be filed to declare that a contract did not subsist at all and that the applicant cannot be held liable for its breach. - - we think that the contention must be upheld, to this extent, namely, that section 42 of the specific relief act does not contemplate a suit like the present......specific relief act.7. section 42 of the specific relief act permits'any person entitled to any legal character, or to any right as to any property, to institute a suit against any person denying, or interested to deny, his title to such character or right, and authorises the court in its discretion to make a declaration that the person suing is so entitled.' before a suit can be filed under the section, therefore, it must relate to the plaintiffs legal character or to his right to any property. the question is whether a declaration that the plaintiff has not incurred any pecuniary liability or that the defendant has incurred any such liability in favour of the plaintiff can be considered to be a declaration about 'legal character or a right to property.'8. the question appears to.....
Judgment:

A.P. Srivastava, J.

1. This is a plaintiffs appeal that arises out of a suit for declaration.

2. The plaintiff-appellant is a limited company carrying on the business of manufacturing gunny bags in the district of Gorakhpur. The defendant is a firm of Ghaziabad, district Meerut, dealing in that commodity. In April 1948 the defendant placed an order with the plaintiff for the supply of certain bales of gunny bags but the transaction fell through because no agreement could be arrived at about rates and because the defendant was unwilling to furnish security as desired by the plaintiff. The defendant again wrote to the plaintiff on the 23rd of April 1948 offering to purchase bags of D. W. Kalidhari quality at the rate of Rs. 98/- per hundred bags and D. W. 40/28 quality at the rate of Rs. 102/- per hundred bags.

On getting this letter on the 26th of April 1948 the plaintiff replied that the rates were acceptable to it and it was willing to supply 50 bales of the first quality and 50 bales of the second quality, provided other expenses besides the price were paid. Thereafter on the 27th of April 1948 the defendant sent a telegram in which he agreed to purchase the goods offered at the rates mentioned. On the same day the plaintiff sent a telegram demanding a security of Rs. 2,000/- from the defendant for the performance of the contract.

Immediately afterwards the defendant informed the plaintiff that he was not willing to furnish the security on any account and enquired from it whether on account of his refusal to furnish the security the contract for the supply of 100 bales of gunny bags stood or was to be treated as cancelled. He was informed by the plaintiff that the contract stood cancelled. Thereafter the defendant threatened to file a suit against the plaintiff for recovery of damages for breach of contract. This led the plaintiff to file the suit out of which the present appeal has arisen. In that suit the reliefs claimed by the plaintiff were:

(a) By passing a decree in favour of the plaintiff, against the defendant, it may be declared that between the parties no transaction about the purchase and sale of 50 bales of hags of D. W. Kalidhari at the rate of Rs. 98/- per hundred and 50 bales of bags of D. W. 48/28, at the rate of Rs. 102/- per hundred, stands and subsists, and that order for costs may be passed against the defendant.

(b) Besides in place of or in addition to the reliefs aforesaid any other relief to which the plaintiff is found entitled by the court may also be decreed in favour of the plaintiff against the defendant.

3. The suit was contested by the defendant on the grounds that it was not maintainable under Section 42 of the Specific Relief Act, that it was not triable by the court in which it had been filed and that in fact the contract between the parties had been duly completed and the plaintiff was not justified in saying that it did not subsist. A plea of insufficiency of court-fee was also raised.

4. The suit was tried by the Civil Judge of Gorakhpur who held that he had jurisdiction to try the suit, that the court-fee paid was sufficient, that in fact there was no subsisting contract between the parties and that no declaration as claimed by the plaintiff could be granted to him under Section 42 of the Specific Relief Act. On the basis of this last mentioned finding the suit was dismissed.

5. The plantiff has come up in appeal and it is contended on his behalf that the view taken by the learned Civil Judge about the scope of Section 42 of the Specific Relief Act is erroneous and that the declaration claimed by the plaintiff should not therefore have been refused.

6. The short question that therefore arises for decision in this appeal is whether a suit for a declaration that a contract between the parties does not subsist and the plaintiff is on that account not liable for damages for breach of contract is maintainable under Section 42 of the Specific Relief Act.

7. Section 42 of the Specific Relief Act permits

'Any person entitled to any legal character, or to any right as to any property, to institute a suit against any person denying, or interested to deny, his title to such character or right, and authorises the Court in its discretion to make a declaration that the person suing is so entitled.' Before a suit can be filed under the section, therefore, it must relate to the plaintiffs legal character or to his right to any property. The question is whether a declaration that the plaintiff has not incurred any pecuniary liability or that the defendant has incurred any such liability in favour of the plaintiff can be considered to be a declaration about 'legal character or a right to property.'

8. The question appears to have arisen first before the Madras High Court in Ramakrishna Pattar v. Narayana Pattar ILR 39 Mad 80: (AIR 1915 Mad 584). A declaration had been claimed in that case that a personal contract subsisted between the plaintiff and the defendant. The contract related to some tax in a kuri. It was contended that a declaration about contractual rights could not be claimed or granted under Section 42 of the Specific Relief Act, as such declarations could not be held to relate to any person's legal character. Accepting this argument it was observed:

'We think that the contention must be upheld, to this extent, namely, that Section 42 of the Specific Relief Act does not contemplate a suit like the present. We take it that a man's 'legal character' is the same thing as a man's status. 'A man's status or 'legal character' is constituted by the attributes which the law attaches to him in his individual and personal capacity, the distinctive mark or dress, as it were, with which the law clothes him apart from the attributes which may be said to belong to normal humanity in general.'

According to Holland, the chief varieties of status among natural persons may be referred to the following causes:-- (1) sex, (2) minority, (3) 'patria potestas' and 'manus' (4) coverture, (5) celibacy, (6) mental defect, (7) bodily defect, (8) rank, caste and official position, (9) Slavery, (10) profession, (11) civil death, (12) illegitimacy. (13) heresy, (14) foreign nationality, and (15) hostile nationality (See Banerjee's Lectures on Specific Relief). We think that a declaration that a valid personal contract still subsists between the plaintiff and the first defendant is not a right to declare a title to a legal character or a title to right to property.'

9. In Tian Sahu v. Mulchand Sahu, AIR 1922 Pat 432 the plaintiff had claimed a declaration that he would be entitled to contribution from the defendant if and when occasion arose and it was held that such a suit was not maintainable. A similar view was taken in Sripat Rao v. Shankar Rao, AIR 1930 Bom 331. Following these two later cases it was held in Nathu Ram v. Mula, AIR 1937 Lah 25:

'A suit for a declaration that the defendant would be liable to contribute to the plaintiff all moneys which the plaintiff as the defendant's surety would be liable to pay does not come under Section 42 as it affects only the pecuniary relationship between the parties to the contract.'

The same view was reiterated in Firm Gopal Das Parmanand v. Mul Raj, AIR 1937 Lah 389 where a declaration that certain sum deposited by the plaintiff with the defendant as margin money was accountable by the defendant to the plaintiff was refused on the ground that it could not be granted under Section 42 of the Specific Relief Act as it affected only the pecuniary relationship between the parties to the contract.

10. More recently in Madanlal v. State of Madhya Bharat, (S) AIR 1955 Madh B 111 a declaration had been claimed that according to the contract between the parties the plaintiff was not personally responsible for payment of any amount due on account of the sale and distribution of foodgrains and it was held that as the declaration did not relate to any legal character or right to properly it could not be claimed under Section 42 of the Specific Relief Act.

11. The question what 'legal character' actually meant was considered in detail in a still more recent case of the Bombay High Court reported in Shanta Shamsher Jung Bahadur v. Kamani Brothers Private Ltd. : AIR1959Bom201 . There it was laid down :

'Legal Character' as used in Section 42 is equivalent to legal status and legal status in a legal right when it involves a peculiarity of the personality arising from anything unconnected with the nature of the act itself which the person of inherence can enforce against the person of incidence.'

In that case it was held that the plaintiff was not entitled to a declaration under Section 42 of the Specific Relief Act that he continued to be the Joint Managing Director of a Company.

12. The principle which emerges from these decisions is that Section 42 of the Specific Relief Act does not contemplate declarations about the pecuniary liability of persons as the same cannot be considered to be declarations about their legal character or any right to property. The learned Civil Judge was therefore quite justified in his view that the declaration claimed by the plaintiff could not be granted to him.

13. The suit of the plaintiff must therefore be held to have been rightly dismissed. The appeal has no force and is dismissed with costs.


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