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U.P. Government Through the Collector, Cawnpore Vs. Lala Nanhoo Mal Gupta - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtAllahabad High Court
Decided On
Case NumberFirst Appeal No. 316 of 1946
Judge
Reported inAIR1960All420
ActsContract Act, 1872 - Sections 20 and 29; Evidence Act, 1872 - Sections 93; Registration Act, 1908 - Sections 2(7), 17(1) and 49; Government of India Act, 1935 - Sections 175(3); Constitution of India - Article 299(1); Code of Civil Procedure (CPC) , 1908 - Sections 35 and 80 - Order 41, Rule 2
AppellantU.P. Government Through the Collector, Cawnpore
RespondentLala Nanhoo Mal Gupta
Appellant AdvocateBrij Lal Gupta, Adv.
Respondent AdvocateS.S. Chandvaria and ;V.K. Barman Ambika Pd, Advs.
DispositionAppeal allowed
Excerpt:
(i) civil - mistake of fact - section 20 and 29 of contract act, 1872 - section 20 deals with common mistake of fact - lease deed specifies date of payment of rent but not commencement of lease - deed not void for uncertainty under section 29. (ii) registration of document - sections 2 (7), 17 (1) (d) and 49 of registration act, 1908 - lease document mentions that plaintiff 'acquired' land from 1944 till 1949 at rs. 21 per month - on conditions specified in the lease deed - 'acquired' is indicative of the fact that documents effected an actual demise - documents compulsorily registrable if not registered does not create any right in favour of plaintiff. - - it was pointed out in the notice that, if the government failed to honour the contract and deliver possession of the aforesaid.....dwivedi, j.1. the u. p. government, the defendant, appeals. the dispute in this case relates to four plots of land situate in the city of kanpur. they are mentioned in schedule a to the written statement filed on behalf of the defendant. markets are held on these plots. the plaintiff filed a suit against the defendant for damages for a breach of an agreement to let out those plots to him.the allegations in the plaint were that in august 4, 1944 the. executive engineer, kanpur division, (lower ganges canal), who was in charge of the management of the aforesaid plots, invited offers for the grant of a lease of the aforesaid plots, that the plaintiff's offer, being the highest, was accepted by the executive engineer, sri shyam lal, on behalf of the defendant, that it was settled between the.....
Judgment:

Dwivedi, J.

1. The U. P. Government, the defendant, appeals. The dispute in this case relates to four plots of land situate in the city of Kanpur. They are mentioned in Schedule A to the written statement filed on behalf of the defendant. Markets are held on these plots. The plaintiff filed a suit against the defendant for damages for a breach of an agreement to let out those plots to him.

The allegations in the plaint were that in August 4, 1944 the. Executive Engineer, Kanpur Division, (Lower Ganges Canal), who was in charge of the management of the aforesaid plots, invited offers for the grant of a lease of the aforesaid plots, that the plaintiff's offer, being the highest, was accepted by the Executive Engineer, Sri Shyam Lal, on behalf of the defendant, that it was settled between the plaintiff and the Executive Engineer that the plaintiff would be granted the lease of the aforesaid plots for a period of five years, that the plaintiff was asked to deposit Rs. 6126/- as six months' rent in advance, that the plaintiff accordingly deposited Rs. 6000/- on the 25th August 1944and Rs. 126/- on the 6th September 1944 that on the 26th August 1944 the plaintiff and the Executive Engineer, signed certain documents, which, according to the plaintiff, were agreementsto lease, and that the plaintiff was assured that he would be let in possession over the aforesaid plots as soon as the sitting tenants vacated them or, in any case, on the 1st April 1945 when the term of their leases was to expire.

The Executive Engineer, however, did not deliver possession of the aforesaid plots in spite ot repeated requests of the plaintiff. On the 23rd February 1945 the plaintiff was informed by Sri B. D. Goyal the then Executive Engineer that the plaintiff's deposit money of Rs. 6126/- was being returned to him, because it was not possible to deliver possession of the aforesaid lands to him. After some intermediate correspondence the plaintiff served on the 19th/23rd June 1945 a notice under Section 80, C.P.C. on the defendant through the Collector, Kanpur.

It was pointed out in the notice that, if the Government failed to honour the contract and deliver possession of the aforesaid plots to the plaintiff, the plaintiff would institute a suit in the appropriate civil court for the specific performance of the contract or for recovery of damages. The defendant failed to deliver possession of the aforesaid lands to the plaintiff, and hence the suit. The plaintiff claimed Rs. 15,000/- as damages for breach of contract.

2. In the written statement filed on behalf of the defendant it is admitted that Sri Shyam Lal, Executive Engineer, accepted the offer of the plaintiff and agreed to give him a lease of the aforesaid plots for a period of 5 years. It was, however, alleged that the plaintiff had executed 4 leases in respect of the aforesaid plots on 26-8-1944, but the plaintiff did not get them registered as required by law. The leases were accordingly void and unenforceable against the defendant. It was further alleged that the leases wore void for mutual mistake of fact.

It was also stated that the Executive Engineer had no authority to grant the leases. No sanction was obtained from proper authority by the Executive Engineer and the leases were not executed in accordance with legal procedure. Lastly, it was alleged that the plaintiff was not entitled to any damages and, at any rate, the damages claimed were very excessive.

3. The evidence consists of some documents and the oral statements of the plaintiff and one Deep Chand on behalf of the defendant. We shall deal with the evidence at the appropriate state hereafter.

4. The trial court repelled all the pleas of the defendant and held that it was liable to pay a sum of Rs. 13,200/- as damages to the plaintiff for the non-performance of the agreement to lease the aforesaid plots. It has further directed that if during the period of 5 years, during which time the leases of the plaintiff would have remained in force plots Nos. 1 and 3 would be required and retained by the defendant for its own use, the defendant would be entitled to claim a refund of the proportionate amount of damages which had been allowed to the plaintiff. As already stated, the defendant appeals against the judgment and decree of the trial court.

5. The plaintiff has filed a cross-objection against that part of the decree which entitles the defendant to claim a refund of the proportionate amount of damages in a certain contingency. It may be stated here that learned counsel for the plaintiff has not pressed his cross objection during the hearing of the appeal; so that nothing need be said in our judgment about the merits of the cross-objection.

6. The memorandum of appeal filed on behalf of the defendant covers a very wide area. Learned Junior Standing Counsel has however confined his challenge to the decree of the trial court to only four grounds. They are :

1. The four leases, which were executed on 26-8-1944, are void under Section 20 of the Indian Contract Act on account of mutual mistake of fact.

2. The said leases do not specify the date from which their term would commence and are, therefore, void for uncertainty.

3. The term of the said leases is a period of five years, and since the plaintiff did not get them registered, no liability can be fastened upon the defendant on the strength of those leases.

4. No damages could be granted to the plaintiff.

7. Since learned counsel for the defendant has not pressed the other grounds mentioned in the memorandum of appeal, it will not be necessary for us to deal with them and we shall now proceed to examine the abovesaid four grounds in their serial order.

8. The plea regarding mutual mistake of fact was taken in paras 4 and 17 of the defendant's written statement. It was said there that the leases were executed under a mutual mistake of the parties that possession of the plots in dispute would be given immediately or in 15 days by evicting the sitting tenants. Since the sitting tenants refused to vacate, it became impossible for the defendant to perform its part of the contract. Learned Junior Standing Counsel has invited our attention to the application (Ex. P) of the plaintiff dated 23-8-1944. By this application the plaintiff intimated to the Executive Engineer that he bad come to know that the term of the lease of the aforesaid plots in favour of the sitting tenants had expired and that he was, therefore, making an offer to accept leases on enhanced rates ot rent. The application ended with the request that his offer, being a substantial offer, should be accepted. On the foot of that application the Executive Engineer passed an order on 26-8-1944 in these terms :

'As this is 50 per cent increase over present rates, hence sanctioned from the date of giving over possession to him.'

It is argued that if the application and the order of the Executive Engineer are read together, it would appear that the leases were granted to the plaintiff on the assumption that the sitting tenants would vacate the land. Notices were issued to the sitting tenants by the Executive Engineer on 25-8-1944 to vacate the disputed plots within 15 days. But the sitting tenants did not vacate the plots and, in spite of his best efforts, the Executive Engineer could not deliver possession of the disputed plots to the plaintiff on account of the unwillingness of the sitting tenants to vacate the plots. It was urged that the aforesaid documents clearly revealed that the contracting parties had wrongly assumed that the sitting tenants would vacate the plots when required by the Executive Engineer to do so. The erroneous assumption of the parties amounted to a mutual mistake of fact and the leases were, therefore, void under Section 20 of the Indian Contract Act.

9. Before examining the merits of the arguments of learned Junior Standing Counsel on this point, we would like to point out that the written statement has inaccurately used the expression 'mutual mistake'. Mistakes in the formation of contracts may be of three kinds, namely, unilateral mistake, mutual mistake and common mistake. In a case of unilateral mistake only one of the contracting partiesis mistaken and the other knows of his mistake. Its consequence is that the contract is void. In a case of mutual mistake the contracting parties misunderstand each other and there is no real correspondence of offer and acceptance. The parties are really not consensus ad idem and there is in fact no agreement at all. In this case also the contract is void. In a case of common mistake both the contracting parties make the same mistake. The minds of the contracting parties are ad idem and there comes into being an agreement, but it is devoid of force and efficacybecause both the parties are mistaken about some fact which is vital to the agreement Section 20 of the Indian Contract Act deals with the common mistake of fact and not mutual mistake of fact. The facts averred in paragraphs 4 and 17 of the written statement clearly suggest that the expression 'mutual mistake' has wrongly been used for 'common mistake.' We would accordingly proceed on the basis that we are called upon to decide whether the agreements in the instant case were void on account of a common mistake of fact committed by the contracting parties at the time of the formation of the contract.

10. At the time of the formation of the contract the subject-matter of the contract was in existence. The plots in dispute were there and the leases of the sitting tenants were to expire on 31-3-1.945. One of the covenants in the leases of the sitting tenants was that they would vacate the plots within15 days from the date of the receipt of a notice from the lessor that they should hand over possession of the plots to the lessor. The plaintiff and the Executive Engineer were aware of this covenant and both of them expected that the sitting tenants would honour the covenant and vacate the plots when they were called upon to do so by the Executive Engineer. So far it cannot be said that the parties were negotiating under a common error as to an essential fact.

The pith and substance of the defendant's grievance really is that the sitting tenants belied the expectation of the contracting parties that they would vacate the plots in conformity with the covenant in their leases. But a contract is not necessarily void because subsequent events have disappointed the expectation of the parties in which it was made. Section 20 does not apply to a case where the contracting parties have made no mistake as to any fact existing at the time of the making of the contract and it is complained that one of them is unable to carry out its part of the contract on account of the unexpected refusal of a third person to carry out his obligation under another agreement. The first contention of learned Junior Standing Counsel, therefore, fails.

11. The next argument of learned Junior Standing Counsel is that those four leases in the instant case do not specify the dates from which they would commence. The leases are, therefore, void for uncertainty. The four leases are marked Exhibits F, G, H and I. In all these leases it is expressly stated that they were to run for a period of five years from 1944 to 1949, but the space where the date of the commencement of the lease should have been mentioned is left blank. It is no doubt true that Section 93 of the Indian Evidence Act forbids the filling in of blanks in a deed with the aid of extrinsic evidence, but it does not affect the court's power to fill in blanks and omissions by the ordinary rules of construction of deeds. We would, therefore, examine the documents marked Exhibits F, G, H and I for the purpose of ascertaining whether the date of thecommencement of the leases had been settled definitely between the plaintiff and the defendant.

At the very beginning of these documents the term and the rent of the tenancy have been stated plainly. It is then mentioned where and how the rent would be paid to the lessee. There is a clear stipulation between the parties that the 'plaintiff would pay six monthly rent in advance at the office of the Executive Engineer or to any such officer as is nominated by him for this purpose. Then it is provided that the first instalment of rent would be paid on 28-8-1944. When the term and the rent of the tenancy were determined, and the rent was made payable in advance half yearly, the payment commencing from 28-8-1944, it appears to us that the term commenced on the same date. Rent may be paid in advance or when it has become due; but as a rule a person would not agree to pay any sum as rent until the lease has actually commenced to run its course.

The agreement that the rent should be paid on 28-8-1944 would, therefore, import that the term of the lease started to run from that date, and the documents aforesaid cannot be said to be uncertain. and incomplete. In Wesley v. Walker, (1878) 38 LT (NS) 284, the defendant was the owner of a piece of land. On 10-2-1877 he signed in favour of the plaintiff a memorandum to the effect that he would let the land for a term of 99 years at 20Is. yearly rent which would be payable quarterly, commencing on the 25th March next. The plaintiff's suit for specific performance of the agreement was resisted by the defendant on the ground that the agreement was uncertain because the commencement of the term was not fixed on the face of it. Fry, J. while rejecting the submission observed:

'But the term for 99 years is accompanied by rent which is clearly payable quarterly during the term, which rent commences on 25-3-1877, and it appears to me, therefore, that the term commences at the same period.'

The decision in Sandill v. Franklin, (1875) 10 CP 377, is also to the same effect and supports our conclusion. The second contention of learned Junior Standing Counsel, therefore also fails.

12. Learned Junior Standing Counsel then contended that the leases were for a period of more than one year. A lease for a period of more than one year can be executed by a registered instrument only. Since the leases in question were not registered, they were unenforceable against the defendant, and the plaintiff's suit for damages was, therefore, liable to be dismissed. The trial court has held that the documents, Exhibits F, G, H and I, were neither leases nor agreements to lease within the meaning of that term in the Indian Registration Act. The said documents, in the opinion of the trial court, merely evidenced an agreement whereby the plaintiff and the Executive Engineer had stipulated that the latter would execute a lease at some future date in favour of the plaintiff in respect of the disputed plots, The trial court, therefore, held that the said documents did not require registration.

13. Learned counsel for the plaintiff has reiterated before us the argument that the aforesaid documents evidenced neither a lease nor an agreement to lease, as defined by the Indian Registration Act. They are merely agreements whereby the Executive Engineer bound himself to let out the disputed plots to the plaintiff by executing proper leases at same future date. A lease is a present and immediate transfer of lessee's rights in the demised property to the lessee, Section 2(7) of the Indian Registration Act provides that a lease includes an agreement to lease. Section 17(1)(d) of the Indian Registration Act enjoins that a lease as well as an agreement to lease should be registered. In the case of Trivenibai v. Smt. Lilabai : AIR1959SC620 , their Lordships of the Supreme Court have held that 'an agreement to lease' is a document which creates a present demise. In other words an agreement between the two parties, which entitles one of them merely to claim the execution of a lease from the other without affecting a present and immediate demise in his favour, is not an agreement to lease, and such an agreement would, therefore not require registration under the Indian Registration Act. We will, therefore, have to see whether the documents, Exhibits F, G, H and I, affected a present and immediate demise of lessee's rights in favour of the plaintiff or they merely entitled the plaintiff to claim the execution of leases from the Executive Engineer without affecting an actual demise in his favour.

14. All the four documents are headed as 'lease'. They are signed by the plaintiff and Sri Shyam Lal, the then Executive Engineer. In the preamble of all the documents it is categorically stated that the plaintiff has 'acquired a plot of land for the period beginning from 1944 and ending with 1949 at the rate of Rs. 21/- per month on the conditions specified in the deed. The word 'acquired' in our view, is indicative of the fact that the documents affected an actual demise in favour of the plaintiff. Condition (17) of the document (Ex, F) recites that it was agreed that if any tax of any sort were imposed on the aforesaid land, which has been given on rent, the lessee would be liable for the payment of such tax. The words 'which has been given on rent' again, indicate that the document affected a present and immediate demise of lessee's rights in favour of the plaintiff. Condition (31) in the documents, Exhibits G and H declared that the leases, which had been executed under any circumstances prior to the execution of these documents would be deemed to be cancelled and annulled.

Condition (31) also shows that these documents effected a present and immediate demise of lessee's rights in favour of the plaintiff, for otherwise it would not have been necessary to make the declaration that the leases existing at the time of the genesis of these documents would be annulled or cancelled. Those leases were to expire on 31-3-1945. If the intention of the plaintiff and the Executive Engineer were that the plaintiff was being given a right to get leases executed at some future date, it would not have been necessary to make the declaration that the existing leases would be deemed to have been annulled or cancelled. Such a declaration was necessary only because the parties intended to affect a present and immediate demise in favour of the plaintiff. Further, the documents in question have also fixed all the essential terms of a lease. They have fixed the rent and the mode of its payment. They have fixed the duration of the leases and they have also further fixed the covenants regulating the relationship of lessor and lessee.

15. It was held in the case of Chapman v. Towner, 1840-6 M and W 100, that if a document has fixed all the essential terms of a lease, it should be construed as a lease. The mere fact that the plaintiff was not actually put in possession on or after the execution of these documents, would not affect their intrinsic character. Where the property, which is the subject-matter of demise, is in possession of a sitting tenant or a trespasser, undoubtedly, possession cannot be immediately taken over by the prospective lessee, but the lease would nonetheless be a lease if the executants, of the documents in-tended to effect a present and immediate transfer of lessee's rights.

16. We are, therefore, of opinion that the documents in question evidenced a lease in favour of the plaintiff and were consequently cornpulsorily regis-terable. Since these documents are unregistered, they are incapable of creating any right in favour of the plaintiff and they do not bind the defendant. The defendant cannot be made liable for breach of any term of these leases. These documents are also inadmissible in evidence on account of Section 49 of the Indian Registration Act, because they are not registered instruments.

17. Learned counsel for the plaintiff, however, contends that he can fall back upon the agreement which may be spelled out of the application of the plaintiff dated 23-8-1944 and the order of the Executive Engineer passed thereupon on 26-8-1944. He says that the said application and the order made out an independent agreement whereby the Executive Engineer bound himself to execute a lease in favour of the plaintiff at some future date and hand over possession of the disputed property whenever the sitting tenants vacated it. The application of the plaintiff dated 23-8-1944 makes an offer to the Executive Engineer that the plaintiff would accept leases for the disputed property at a specified rate of rent. The order of the Executive Engineer dated 26-8-1944 records an acceptance of the plaintiff's aforesaid offer. The offer and acceptance of the promise would constitute an agreement under the Indian Contract Act, and we think that the plaintiff would be entitled to damages for breach of that agreement if it could be held that the agreement was enforceable against the defendant.

18. We may also state here that even if the documents Exhibits F, G, H and I, were held to be non-registerable documents, the defendant can be fastened with the liability for damages upon their strength only if it could be held that those documents evidenced an agreement which was enforceable against the defendant. All those documents recite in their preambles that the plaintiff had acquired the demised property from His Majesty the King Emneror of India through the Executive Engineer. So far as the order of the Executive Engineer dated 26-8-1944 goes, it does not even mention that the order was being passed in the name of His Majesty the King Emperor of India. The order of the Executive Engineer and the documents, Exhibits F, G, H and I, were passed and executed in the year 1944 when the Government of India Act, 1935, was' in force.

Section 175(3) of the Government of India Act, 1935, enjoins that all contracts made in the exercise of the executive authority of a Province shall be expressed to be made by the Governor of the Province and all such contracts made in the exercise of that authority shall be executed on behalf of the Governor by such persons and in such manner as he may direct or authorise. Section 175(3) thus lays down the procedure for the execution of contracts by the Government of a Province. Two things are necessary under this provision; firstly, the contract should be expressed to be made by the Governor of the Province and, secondly, the contract should be executed by such person and in such manner as the Governor may direct or authorise. As far as the second j condition is concerned, it is fulfilled in this case, because it is not disputed before us that the Executive Engineer, Sri Shyam Lal, had the authority to execute the contract on behalf of the U. P. Government.

But the first condition glaringly remains unfulfilled. Neither the documents, Exhibits F, G, H and I, nor the order of the Executive Engineer dated 26-8-1944, as already stated, are expressed to be made by the Governor of the United Provinces. Since they are not expressed to be made in the name of the Governor of the United Provinces, they cannot impose any obligation on the Government of U. P. Proprio Vigore they are incapable of being enforced against the Government of U. P., notwithstanding the fact that they may evidence a valid and binding agreement between the plaintiff and the Executive Engineer.

19. In the case of Brij Lal v. State of U. P. : AIR1954All393 , it was held by Mr. Justice Moo-tham (as he then was) that the provisions of Sub-section (3) of Section 175, Government of India Act, 1935, were mandatory. It was observed by him that a contract executed on behalf of the Government of Province should not only be executed on behalf of the Governor of the Province but also in his name. The agreement in that case did not purport to have been made in the name of the Governor of U. P. and it was held that it was not a binding agreement.

20. Section 175(3) aforesaid corresponds with Article 299(1) of the Constitution. In the case of Chaturbhuj Vithaldas v. Moreshwar Parashararn : [1954]1SCR817 , the contracts were not expressed to be made by the President of India as required by Article 299(1), and it was argued that they were, therefore void. Dealing with this contention Bose, J. was pleased to observe as follows :

'It may be that Government will not be bound by the contract but that is a very different thing from saying that the contracts as such are void and of no effect. It only means that the principal cannot be sued; but we take it there would be nothing to prevent ratification, especially if that was for the benefit of Government.'

21. The following deductions can be made from that decision; firstly, contracts, which are not expressed to be made in the name of the President or the Governor, are not void; secondly, such contracts are not enforceable against the Union or the State Government, and, thirdly, they would become enforceable against the Union or the State Government if they are ratified by them.

22. In the case of Thawardas Pherumal v. Union of India : [1955]2SCR48 , the contract in question was executed by the Additional Chief Engineer and not by the Executive Engineer. It seems that thc Additional Chief Engineer was not authorised to enter into an agreement on behalf of the Dominion Government and it was observed by the Supreme Court that Governments can only be bound by contracts which are entered into in a particular way and which are signed by proper authority. The Calcutta High Court has also adopted a similar view, vide Ghosh Singh Partners Ltd. v. Union of India : AIR1959Cal287 .

23. All the above mentioned cases clearly show that if a contract is not expressed to be made in the name of the Governor of Province it will not be enforceable against the Government of that Province. We have already seen that in the present case the documents, Exhibits F, G, H and I, and the order of the Executive Engineer dated 26-8-1944 are not on their face expressed to be made in the name of the Governor of the United Provinces. Consequently these documents and the order of the Executive Engineer do not make out an agreement binding on and enforceable against the defendant. The order of the Executive Engineer may also be voidfor uncertainty but we do not express any final opinion thereon.

24. Learned counsel for the plaintiff respondent at this stage pointed out that the defect in the form of documents, which we have already discussed above, was not pleaded in the written statement, nor was it taken at any stage in the trial court. He also points out that the memorandum of appeal does not contain any ground to the effect that the documents aforesaid do not make out an enforceable contract. The defendant should not therefore be permitted to raise this objection at this late stage. If the defendant were permitted to raise this objection at this stage, it would cause serious prejudice to the plaintiff, inasmuch as he would be deprived of an opportunity of proving that the agreements in question were ratified by the Government. He says that, in the circumstances, the objection regarding the enforceability of the agreement is not a pure question of law but is a mixed question of law and fact and should not be permitted to be raised at the stage of arguments in appeal. We are not inclined to accept this line of argument of learned counsel for the plaintiff.

We have no hesitation in saying that, if the contesting parties in the present suit were two individuals, it would not have been just and proper for the court to permit the defendant to object for the first time at the stage of arguments in appeal that the suit contract was not enforceable against him, because in that case the plaintiff would not be able to plead ratification of the contract by the defendant. Ratification is essentially a question of fact and the plaintiff would adduce no evidence to grove ratification if the defendant had not questioned the enforceability of the contract at the proper stage, If the defendant is permitted to object to the enforceability of contract at the stage of arguments in appeal for the first time, there is no doubt that it would cause serious prejudice to the plaintiff.

Courts have, therefore, generally held that parties in appeal should not be permitted to raise objections which are not pure questions of law and which require further investigation of facts, if such objections have not already been taken in the trial court at the proper time. But the position in this case is fundamentally different on account of the fact that the defendant is not a private individual but the U. P. Government. A person may file a suit against a private individual whenever he likes. But a suit against the Government can be filed only after a notice under Section 80, C. P. C. has been served upon the Government. It is now well settled that the provisions of Section 80, C. P. C. are mandatory and they must be strictly complied with. One of the requirements of this section is that the notice, which is served upon the Government, should state the cause of action for the intended suit.

If a suit is instituted against the Government on the strength of a notice which does not state the cause of action, the suit would be liable to be dismissed. Similarly, if the suit is instituted against the Government on the strength of a notice which does not state the cause of action, the suit would be liable to be dismissed. Similarly, if the suit is instituted against the Government on the basis of a cause of action which is different from the cause of action stated in the notice, it would also be liable to be dismissed. The object underlying the section is to give a clear and certain notice of the claim to the Government so that, if it is so advised, it may settle the claim and avoid the impending threat of a suit and consequential costs of the suit in the event of the claim being decreed, and it has, therefore, beenheld that it was not permissible for a suitor to insti-lute a suit upon the basis of a cause of actionwhich has not been stated in the notice, or whichis substantially different from the cause of actionstated in the notice.

25. In the case of McInerny v. The Secretary of State, ILR 38 Cal 797, a suit was instituted against the Secretary of State for India for damages for negligence. The notice served upon the Secretary of State for India under Section 80, C. P. C. had stated that he was liable to be sued for damages for negligence. The suit was dismissed, whereupon, the plaintiff filed an appeal. In the course of the hearing of the appeal it appeared to the plaintiff that hecould not succeed on the basis of negligence and, therefore, he made an application for the amendment of hi.s plaint. The prayer was that he should be permitted to change the cause of action from negligence to nuisance. The application for amendment was- not allowed on the ground that the notice under Section 80 had not stated that the cause of action for the claims was founded on nuisance, and it was said that the amendment sought to introduce a cause of action which was not mentioned in the notice. Jen-kins, C. J,, while disallowing the application for amendment thus observed :

'The plaint as now proposed by way of amendment differs in an essential degree from the original plaint. The original plaint proceeded upon negligence, whereas the new plaint proceeds upon nuisance in the form of obstruction on the highway, KG that it is impossible to say that the cause of action is the same. This brings in the plaintiff's way the difficulty created by Section 80 of the Code.....The notice which was served as a preliminary to the plaint as originally framed pointed to a suit based on negligence and it stated a cause of action different from that on which the plaintiff would rely in his proposed plaint. It follows, therefore, that it is not open to us to give the plaintiff permission to amend his plaint.'

In the case of Province of Madras v. R. B. PoddarFirm AIR 1949 Mad 214, a suit was instituted against the Provincial Government of Madras. The plaintiff, in the course of trial, wanted to amend the plaint by adding a new paragraph to it. That amendment was allowed by the trial court, and thereupon the Provincial Government went up in revision to the High Court and prayed that the order of the trial court allowing the amendment should be set aside, because the amendment introduced a new cause of action which had not been stated in the notice under Section 80, C. P. C. The suit, as originally framed, was for a declaration that the acquisition by the Government of certain property belongingto the plaintiff was illegal, mala fide, unreasonable, ultra vires and without jurisdiction.

The newly added paragraph to the plaint was to the effect that since the institution, for the use of which the original acquisition had been intended, had ceased to exist, there was no further necessity for the acquisition and, therefore, the Government should not take any further steps in re-lation to the acquisition. It was held by Govinda Menon, J, that the amendment introduced a new cause of action which was inconsistent with the original one, and the order of the trial court allowing the amendment was consequently set aside. The reason given by him for disallowing the amendment was that the plaintiff could not introduce in the plaint a cause of action which had not been stated in the notice under S, 80. It will be useful to quote this observations on the point. The learned Judgesaid as follows :

'If this were a suit between two parties wherein the compelling necessity of a notice under Section 80, C. P. C. did not exist, probably an amendment like this if allowed in its discretion by a lower court would not be interfered by this Court. But in this case, Section 80 is an insuperable bar. Notice stating the cause of action has to be given to the Government and a suit can be filed only 60 days thereafter . . . . Section 80 has to be strictly complied with and it is applicable to all causes of action and all kinds of reliefs. In the Government of Madras v. Vellayyan Chettiar : AIR1944Mad544 , this Court has held that Section 80, C. P. C. is explicit and mandatory. Where the section has not been complied with, a Court has no jurisdiction to try the action instituted against the Government.'

26. After discussing some reported cases on the question the learned Judge went on to observe :

'As I am of opinion that the amendment now allowed has introduced a fresh cause of action which was outside the scope of the suit as originally framed and was inconsistent with the allegation made earlier, the learned Sub Judge was not justified in allowing the amendment now, as ex concessis no previous notice has been served on the Government informing them of this new cause of action.'

27. There is thus no doubt that where a suit is instituted against the Government, it is not open to the plaintiff to make a fundamental departure in his plaint from the cause of action already mentioned in the notice under Section 80 C.P.C. In the instant case the plaintiff had served two notices on the U. P. Government. The said notices were sent by registered post to the Collector of Kanpur. One of them is dated the 5th January 1945 and is Ex. N. The other one is dated the 19th/23rd June 1945 and is Ex. VIII. Both these notices stated that on the 25th August 1944 and 6th September 1944 the Executive Engineer, Kanpur Division, Lower Ganges Canal, entered into contracts with the plaintiff for the lease of the suit properties that the plaintiff was entitled to the vacant possession of the suit properties by virtue of the contracts dated the 25th August and 6th September 1944, and that, if possession of the suit properties were not delivered to the plaintiff within two months of the date of the receipt of the notices, the plaintiff would institute a suit against the Government for the specific performance of the contracts or for damages for breach of contracts.

It is noteworthy that nowhere in those notices, either expressly or impliedly has it been stated that the contracts were ratified by the Government, and the Government was, therefore, also liable on account of its ratification of the contracts. The reason for this omission is obvious. It has never struck to the plaintiff or his advisers up to the time of arguments in appeal, when one of us pointed out the serious infirmity in the documents evidencing the agreements to lease the suit-properties, that the agreements were unenforceable against the Government because they were expressed to be mads in the name of His Majesty the King Emperor and not the Governor of U. P. as required by Section 175(3) of the Government of India Act, 1935.

Only when it was pointed out by us that the agreements, upon which he was seeking to rely, could not impose any liability upon the Government because they had not been executed in conformity with the provisions of Section 175(3) of the Government of India Act, 1935, learned counsel for the plaintiff tried to salvage the case by falling back upon the plea of ratification of the agreements by the Gov-erntment. Be that as it may, we are quite certainthat neither of the notices mentioned the fact of ratification of the agreements by the Government. The plaint also does not mention any fact or facts which may enable us to hold that the plaintiff had taken the plea of ratification of the agreements by the Government. The evidence, oral and documentary, also does not indicate that the Government had in fact ratified the agreements in question.

28. In short the position, therefore, is this: Ratification of the agreements, which are ex facie unenforceable against the Government, was not stated in the notices under Section 80 C.P.C. It was also not pleaded in the plaint, and the record of the case does not contain any fact or facts which would show that the Government had in fact ratified the said agreements.

29. Agreements, as they stand, arc defectived and unenforceable against the Government. It may be that the plaintiff may sue the Executive Engineer on the strength of those agreements, but that would not afford him a cause of action to lay the claim against the Government. The Government could be bound by those agreements only if it hud ratified them. Agreements by themselves have got no force and efficacy against the Government and the act of ratification alone could create a privity of contract between the plaintiff and the Government. The act of ratification would, therefore, be a matter of substance and would constitute the vital link in the chain of facts which would make up the cause of action for a claim against the Government. Minus ratification the plaintiff's cause of action against the Government is inchoate and incomplete. Since, the notice under Section 80 C.P.C. did not mention the fact of ratification of the defective agreements by the Government, it would not be open to the plaintiff to introduce by way of amendment the plea of ratification in the plaint, for that would mean substantial variance from the notice.

A fortiori he cannot be permitted to urge that the defendant should not be allowed to impeach the enforceability of the agreements in suit for the first time at the stage of hearing of the appeal, because that would deprive him of the opportunity of proving ratification of the aforesaid agreements by the Government. No question of prejudice can in law arise in this case, if we permit the defendant to question the enforceability of the agreements for the first time at this stage on the ground of their non-conformity with the provisions of Section 175(3) of the Government of India Act, 1935, because the plaintiff did not state in his notice under Section 80 that the Government had ratified the aforesaid agreements, and he cannot now be permitted to take that plea. We have consequently permitted the defendant to argue that the agreements, which were the basis of the suit in this case, were not expressed in the name of the Governor of U.P. and could not, therefore, be enforced against the Government of U. P.

If any authority is needed to support what we have done, it will be found in a decision of their Lordships of the Supreme Court in the case of Keshavlal Lallubhai v. Lnlbhai Trikumlal Mills Ltd. : [1959]1SCR213 . In that case a suit was filed for the recovery of damages for breach of contract for non-delivery of certain cotton goods. The plaintiff's claim was decreed by the trial court, but on appeal it was dismissed. The High Court dismissed the claim on tie ground that the agreement was vague and uncertain. No such plea was ever taken in the trial court nor even in the grounds of appeal. It was contended that the appellate court went wrong in allowing the appellant to raise an objection forthe first time in appeal that the agreement was vague and uncertain. Mr. Justice P. B. Gajendragadkar repelled that contention and observed as follows:

'It cannot be said that it was not open to tha High Court to allow such a plea to be raised even for the first time in appeal. After all, the plea raised is a plea of law based solely upon the construction of the letter which is the basis of the case for the extension of time for the performance of the contract and so it was competent to the appeal Court to allow such a plea to be raised under Order 41 Rule 2 C.P.C. If, on a fair construction, the condition mentioned in the document is held to be vague or uncertain, no evidence can be admitted to remove the said vagueness or uncertainty. The provisions of Section 93 of the Indian Evidence Act are clear on this point. It is the language of the document alone that will decide the question. It would not be open to the parties or to the court to attempt to remove the defect of vagueness or uncertainty by relying upon any extrinsic evidence. Such an attempt would really mean the making of a new contract between the parties. That is why we do not think that the appellants can now effectively raise the point that the plea of vagueness should not have been entertained in the High Court.'

30. Just as in that case the agreement was on its face vague and uncertain and no extrinsic evidence could be produced to remove the vagueness and uncertainty in the agreement, similarly in this case the agreements on their face are unenforceable against the Government and no evidence can be introduced in the case to prove that the Government had ratified those agreements because the fact of ratification has not been stated in the notice under Section 80 C.P.C. The question that the Government cannot be sued for damages for breach of those agreements, therefore is a question of construction of the agreements and is a pure question of law and may be permitted to be raised for the first time at the stage of the hearing of the appeal under Order 41 Rule 2, C.P.C.

31. Reliance was placed by learned counsel for the plaintiff on the decision of their Lordships of the Supreme Court in Kalyanpur Lime Works Ltd. v. State of Bihar : [1954]1SCR958 . The plaintiff appellant in that case filed a suit against the State of Bihar for the specific performancc of a contract. The suit was decreed by the trial court but on appeal the Patna High Court reversed the judgment and dismissed the suit. One of the grounds for dismissing the suit was that the contract, not having been executed by the proper authority, was not enforceable against the Government on account of Section 30 of the Government of India Act, 1915. On appeal before their Lordships of the Supreme Court it was urged on behalf of the plaintiff that the defendant did not plead in its written statement that the contract was unenforceable because it bad not been executed by the Collector who was admittedly the proper authority for that purpose.

There was no ground in the memorandum of appeal to that effect, and the High Court should not have permitted the defendant to take that objection for the first time at the stage of arguments in appeal. Their Lordships of the Supreme Court upheld the contention and ruled that the objection ought not to have been allowed to be raised. We have given our careful consideration to the case, and it seems to us that the decision in that case turned on its own peculiar facts. It appears that the plain-tiff had sent six copies of the draft leases to the Collector for signature. Two of them were returned to him and they did not bear the signature of the Collector.

The other four copies were not produced by the defendant, so that the plaintiff's argument waa that if the defendant had taken the plea of unenforce-ability of contract at the proper time, he would have procured the production of the four withheld draft leases which would have shown that they bore the signature of the Collector. In those circumstances, it is quite evident that the objection about the unenforceability of the contract was not a pure question of law but it also involved investigation of the fact whether the withheld draft leases were signed by the Collector,

32. In the case before us, it has not been urged that there was some other document of lease which was expressed to be made in the name of the Governor. The notices under Section 80 C.P.C. and the plaint alleged that the plaintiff and the Executive Engineer entered into an agreement for the lease of the disputed plots on 25th August 1944, and that the plaintiff signed on 26th August 1944 some documents. In his statement in Court plaintiff admitted that on 25th August 1944 the Executive Engineer had agreed orally, to let out the disputed plots to him. He also admitted in cross examination that both he and the Executive Engineer had signed the printed lease forms on 26th August 1944. He did not state that he had signed some other documents besides the printed lease forms, which are Exhibits F,G, H and I.

He thus founded his claim on the said documents alone. We may also mention here that while the defendant's counsel was arguing before us on 16th July 1959, we invited the attention of counsel for the plaintiff to the aforesaid flaw in the documents Exhibits F, G, H and I. Counsel for the plaintiff opened his arguments on 20th July 1959 and made an unequivocal statement which has gone down in the notes of arguments made by one of us, that the order dated 26th August 1944 of the Executive Engineer accepting his offer constituted the basis of his claim. He did not then say that there were some other documents evidencing the agreement between him and the Executive Engineer and they were expressed to be made in the name ot the Governor.

33. There is one other circumstance which distinguishes this ease from the Kalyanpur case : [1954]1SCR958 . While in that case the the defendant had not denied in its written statement the enforcea-bility of the contract in this case the defendant has made an averment in paragaphs 21 and 22 of its written statement that the leases, Exhibits F, G, H and I were void and unenforceable, and correct legal procedure had not been observed in their execution. No doubt the defence, that the leases aforesaid were unenforceable for non-compliance with the provisions of Section 175(3) of the Government of India Act, 1935, has not been pleaded specifically in so many words, but such a plea was implied in the facts stated in paragraphs 21 and 22 of the written statement. To sum up, we consider that in view of the distinguishing features indicated above, the Kalyanpur case is not applicable to the facts of this case.

34. We have carefully perused the entire evidence in the case and we fire satisfied that, in the circumstances of this case, the Government could not have probably ratified the agreements in question. As already stated, the agreements marked Exhibits F, G. H and I were entered into on the 26th August 1944. It appears that possession of the demised property was not given to the plaintiff, so that on the 22nd November 1944 the plaintiffsent a letter, Ex. XIII, to the Executive Engineer requesting that he -should arrange for delivery ot possession at his earliest convenience.

Possession could not still be delivered, and hence the plaintiff sent a notice under Section 80 C.P.C. to the Collector, Kanpur, on the 5th January 1945. A reply to the notice was sent from the office of the Executive Engineer on the 23rd February 1945. The reply letter is Ex. IV. It states that as it was not possible to give possession of the demised property to the plaintiff, the amount of Rs. 6126/- which was deposited by the plaintiff on account of rent in advance, was being returned by a crossed cheque. Thereafter the plaintiff served another notice under Section 80 on the Collector, Kanpur on the 19/23rd June 1945. In reply to that notice the office of the Executive Engineer informed the plaintiff by its letter, Ex. X. dated 25th/27th August 1945 that the leases executed by the plaintiff and the Executive Engineer were unregistered and were not legally binding.

35. The defendant examined one Deep Chand, Overseer, Canals, on its behalf. He stated in cross-examination that the leases of lands adjoining the canal bank, Kanpur, had always been executed by the Executive Engineer and the confirmation or ratification of such leases by any other authority was not necessary. According to him the Executive Engineer Canals, was the final authority for giving leases of lands adjoining the canal bank irrespective of the term of the leases. It would thus appear from his cross-examination that the agreements in question could not have been sent to the Government for ratification.

36. Learned counsel for the plaintiff then invited our attention to para 3 of the plaint as well as written statement. In para 3 of the plaint it is averred that the offer of the plaintiff, being the highest offer was accepted by the Executive Engineer 'for and on behalf of the defendant'', and it was settled that the plaintiff would be given the lease of the disputed lands for five years. It is further stated that the plaintiff was asked to deposit Rs. 6000/- as six months' rent in advance and the plaintiff deposited the said amount on 25-8-1944.

Para 3 of the written statement filed by the defendant states that the contents of para 3 of the plaint were admitted. Learned counsel for the Plaintiff submits that the defendant's admission of the facts stated in para 3 of the plaint would amount to ratification of the agreements in question by the defendant, and the claim of the plaintiff cannot, therefore, be said to have been wrongly decreed by the trial court. This argument, though apparently plausible and attractive, is inherently fallacious. Ratification, as we have already said, is an essential link in the chain of facts which would constitute the plaintiff's cause of action against the defendant. Without ratification the plaintiff would have no cau.se of action to institute a suit against the defendant A cause of action must be antecedent to the suit and it cannot be spelt out of any allegation made in the pleadings of the parties in the suit itself. See Ramjoy Modak v. Durga Charan Nath : AIR1929Cal830 . We accordingly reject the contention of learned counsel for the plaintiff that the defendant's admission of the facts mentioned in para 3 of the plaint amounted to ratification of the questioned agreements.

37. Learned counsel for the defendant lastly contended that the trial court has erred in awarding damages to the plaintiff. The plaintiff and the Executive Engineer had undoubtedly entered into agreements to the effect that the latter would letout some lands belonging to the Government in the city of Kanpur. Later on, for reasons which are not material in deciding the question of damages, the Executive Engineer failed to deliver possession of the demised property and tried to resile from the agreements. There was, therefore, undoubtedly a loss of bargain to the plaintiff and he was entitled to get appropriate damages for the loss of bargain. It appears from the evidence that after resiling from the agreements the Executive Engineer let out by public auction the two plots in Sabzimandi and Ghasiari Mandi.

The remaining two plots, which were also to be let out to the plaintiff, were, however, not let out by the Executive Engineer and they were retained by the Government. The plaintiff had offered a rent of Rs. 18/6/3 per day for the plot in Sabzimandi and Rs. 11/14/- per day for the plot in Ghasiari Mandi. The total of these two items comes to Rs. 30/4/3. These two plots were let out by a subsequent public auction at Rs. 46/4 per day. It seems that in the course of arguments before the trial court learned counsel for the parties had made an agreed statement that the profits from the aforesaid two plots could be estimated at 25 per cent, of the daily rental of the plots. In other words, the estimated profits calculated at the rate of 25 per cent, would be about Rs. 11/- and odd per day.

Calculated at this rate the total amount of estimated profits for a period of five years which was the term of the leases, would exceed the sum op Rs. 13200/- which has been awarded as damages by the trial court. We think that, in the circumstances of this case, damages to the tune of Rs. 13200/-are not excessive. Kanpur is the biggest industrial city in this State and daily profit of Rs. 11/- from the lands in Sabzimandi and Ghasiari Mandi does not appear to be improbable. We believe that the plaintiff could have made even higher profits. But since he has agreed to claim damages at the rate of about Rs. 11/- per day, he is not entitled to an amount higher than the sum of Rs. 13200/- which was awarded to him by the trial court.

38. The result of the foregoing discussion isthat the appeal of the defendant will have to beallowed and the plaintiffs suit dismissed. Sincethe appeal is being allowed mainly on a groundwhich had not been specifically taken by the defen-dant either in the trial court or before us, until itwas indicated by one of us to learned counsel forthe defendant, we consider that it will be properto make the costs easy here as well as in the trialcourt. Accordingly we allow this appeal and setaside the judgment and decree of the trial court anddismiss the suit. The parties shall bear their owncosts in circumstances of the case. The cross objection is also dismissed.


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