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State of Orissa Vs. Rajballav Misra - Court Judgment

LegalCrystal Citation
SubjectContract
CourtOrissa High Court
Decided On
Case NumberSecond Appeal No. 39 of 1972
Judge
Reported inAIR1976Ori19
ActsContract Act, 1872 - Sections 65; Constitution of India - Article 229(1)
AppellantState of Orissa
RespondentRajballav Misra
Appellant AdvocateB.L.N. Swamy, Addl. Standing Counsel
Respondent AdvocateS.C. Sahu, Adv.
DispositionAppeal allowed
Cases Referred(Anath Bandhu v. Dominion of India
Excerpt:
.....and in advancing money to the defendant in that connection acted on behalf of the state of orissa, and so the plaintiff's suit clearly comes under article 149 of the old limitation act, and the decision of the court below that the suit is one under article 115 of the old limitation act is incorrect and illegal. from the plaint and the written-statement it is clearly evident that the sub-divisional officer, hindol, acted on behalf of the state of orissa, and the defendant agreed with the sub-divisional officer, hindol to do the job in question for the state of orissa and in that connection he received advance payments from the said s. that being so, the state of orissa has rightly instituted this suit for the realisation of the amount advanced to the defendant and so this suit..........was void and so the plaintiff was not entitled to claim any relief in accordance with the said void contract. it also found that the contract was one between the sub-divisional officer, hindol and the defendant and not between the government of orissa and the defendant, and so the suit was one under article 115 of the old limitation act and as the suit was filed beyond the period of 3 years it was barred by time.6. mr. swamy, the learned counsel for the state, has very seriously challenged the above mentioned findings of the court below. he contends that on the pleadings of the parties it is evident that the sub-divisional officer, hindol in entering into the contract in question and in advancing money to the defendant in that connection acted on behalf of the state of orissa, and so.....
Judgment:

S. Acharya, J.

1. The unsuccessful plaintiff in both the courts below is the appellant in this second appeal.

2. The plaintiff's case, in short, is that the defendant entered into a contract with the plaintiff through Sub-divisional Officer Hindol for the construction of a godown-cum-inspection room in village Banamalipur at an estimated cost of Rs. 5,000/- and he executed an agreement (Ext. 1/A, dated 21-3-1952) to that effect, and on 23-5-1952, 21-3-1952 and 6-1-1953 he received advance payments in cash and also received 20 bags of cement priced at Rs. 105-15-0 on that account. Thus in all the plaintiff advanced Rupees 1305-15-0 to the defendant for the construction of the aforesaid work. The defendant after receiving the aforesaid payments did not complete the said construction work, and so by a notice dated 19-2-1953 the said contract was determined by the plaintiff. By the time the contract was determined, the defendant had done only a portion of the work, the value of which was estimated at Rupees 379-11-0. The plaintiff demanded the balance amount of Rs. 926-4-0 but the defendant did not pay the same. The plaintiff, therefore, instituted the suit for the realisation of the aforesaid amount of Rs. 926-4-0 with interest at the rate or 6% per cent. per annum, all told amounting to Rs. 1816/-.

3. The defendant's case is that he did not execute the aforesaid agreement in his personal capacity but he did so as the Naib Sarpanch of the Gram Panchayat. According to the defendant, as the said agreement had been executed by him in the capacity of a Naib Sarpanch of the Gram Panchayat, the plaintiff could not realise any amount personally from the defendant without impleading the Gram Panchayat in the suit.

The defendant admits that he had received Rs. 1,200/- in cash and 20 bags of cement from the Sub-divisional Officer, Hindol on account of the said work, but he claims that he spent a sum of Rs. 1298-12-0 on the portion of the work done by him and so he demands Rs. 98-12-0 from the plaintiff. The defendant pleads that proper valuation and accounts of the construction work done by him should be made. It is vaguely pleaded that there was no contract between the plaintiff and the defendant. The other pleas taken by the defendant in his written statement are not relevant for our purpose, and so they need not be stated in detail.

4. The trial court found that the defendant in his personal capacity executed the aforesaid agreement as a contractor and in this respect he did not act on behalf of the Grama Panchayat; that there was subsisting contract between the parties and the defendant committed breach of his obligation and that the accounts given by the plaintiff in connection with the work in question were correct. But it found that as the plaintiff had filed (a claim?) before the Certificate Court, the suit was barred under the provisions of Section 45 of the Orissa Public Demands Recovery Act.

5. On appeal by the plaintiff, the court below held that there was no contract between the plaintiff and the defendant in accordance with Article 299(1) of the Constitution 'of India and hence the alleged con-tract was void and so the plaintiff was not entitled to claim any relief in accordance with the said void contract. It also found that the contract was one between the Sub-divisional Officer, Hindol and the defendant and not between the Government of Orissa and the defendant, and so the suit was one under Article 115 of the old Limitation Act and as the suit was filed beyond the period of 3 years it was barred by time.

6. Mr. Swamy, the learned counsel for the State, has very seriously challenged the above mentioned findings of the court below. He contends that on the pleadings of the parties it is evident that the Sub-divisional Officer, Hindol in entering into the contract in question and in advancing money to the defendant in that connection acted on behalf of the State of Orissa, and so the plaintiff's suit clearly comes under Article 149 of the old Limitation Act, and the decision of the court below that the suit is one under Article 115 of the old Limitation Act is incorrect and illegal.

7. The suit has been filed by the State of Orissa represented by the Collector of Dhenkanal. In the plaint it has been averred that the defendant entered into a contract with the plaintiff to make the construction in question and the Sub-divisional Officer, Hindol paid different amounts of money to the defendant on that account on behalf of the plaintiff. The defendant has not denied that aspect of the plaint case. Rather in paragraph 10 of the written statement it is stated that the terms of the agreement as mentioned in the plaint are no doubt binding on both the plaintiff and the Gram Panchayat. Again in paragraph 11 it has been stated that the plaintiff or on their behalf the S. D. O. Hindol was to allot site for the aforesaid work. In the written statement it is no-where stated that the Sub-divisional Officer, Hindol did not act on behalf of the State of Orissa. From the plaint and the written-statement it is clearly evident that the Sub-divisional Officer, Hindol, acted on behalf of the State of Orissa, and the defendant agreed with the Sub-divisional Officer, Hindol to do the job in question for the State of Orissa and in that connection he received advance payments from the said S. D. O. who paid that amount on behalf of the State. That being so, the State of Orissa has rightly instituted this suit for the realisation of the amount advanced to the defendant and so this suit clearly comes under Article 149 of the old Limitation Act, and as the same was filed within 60 years of the payment of the advance money it is not barred by limitation.

8. The finding of the court below that as the contract between the plaintiff and the defendant is not in accordance with Article 299(1) of the Constitution and is accordingly void, the plaintiff is not entitled to any relief in this suit, is legally incorrect. The court in arriving at that finding has lost sight of the provisions of Section 65 of the Contract Act. In Thakurain Harnath Kuar v. Thakur Indar Bahadur Singh (AIR 1922 PC 403) their Lordships of (sic) Privy Council have held:

'Section 65 deals with (a) agreements enforceable by law and (b) with agreements not so enforceable. By Clause (g) of Section 2 an agreement not enforceable by law is said to be void. An agreement, discovered to be void, is one discovered to be not enforceable by law, and, on the language of the section, would include an agreement that was void in that sense from its inception as distinct from a contract that becomes void.'

In the present case the contract in question is no doubt a void one as it is not in conformity with the provisions of Article 299(1) of the Constitution of India. Though the said contract is void from its inception, the plaintiff can recover any amount paid to the defendant in accordance with the said void contract as per the provisions of Section 65 of the Contract Act. Mr. Sahu, the learned counsel for the respondent, cited the single Judge decision reported in AIR 1955 Cal 626, (Anath Bandhu v. Dominion of India) wherein the learned Judge in effect disagreeing with the above-mentioned Privy Council decision has held :

'The word 'discovered' must in my view mean that with available materials at the time of the agreement it could not be known that the agreement was void but subsequent materials or events not available at the time of the agreement disclose that it was void, and even void to such an extent as renders it void ab initio.

But I cannot persuade myself to believe that an agreement at its very inception in outright disregard of express statute or constitutional provision which renders the agreement unenforceable against the Government can be said to be discovered to be void within the meaning of Section 65, Contract Act. If that was the intention then all that Section 65, Contract Act, need have said is 'whether an agreement is void' and not 'discovered to be void.'

With respect I do not agree with the above view taken in the aforesaid Calcutta decision and I prefer to follow, nay I feel bound by the Privy Council decision mentioned above on this point.

9. Thus both the findings of the court below on which the plaintiff's suit has been dismissed are legally incorrect and are accordingly set aside.

10. In the present case, the defendant has admitted to have received Rs. 1,200/- in cash and 20 bags of cement for the work in question. For reasons stated above he cannot seek shelter under the plea that as the agreement under which he received the said amount is void he is not to repay the said amount or any part thereof. The court below has not directed its attention to decide as to what amount of money the defendant has to pay to the plaintiff as he did not complete the work in question as per the aforesaid agreement. According to the plaintiff, the value of he work done by the defendant was only Rs. 379-11-0 but according to the de-fendant the value of the said work was Rs 1298-12-0, So the court has to assess the actual amount of money, if any, to be refunded by the defendant to the plaintiff out of the advance payments made to the defendant for the aforesaid work in question.

11. The second appeal is accordingly allowed. The case is remanded to the court below for proper assessment on the above mentioned aspect of the matter and for disposal in accordance with law within as short a time as possible. The court below may, if it thinks necessary, allow both the parties to adduce additional evidence on the above aspect of the matter.

12. Costs of this appeal will abide the final decision.

13. The L. C. R. be sent back immediately.


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