Jagat Narayan, C.J.
1. This is an appeal by the State against a decree passed by the Senior Civil Judge, Jaipur City. On a suit brought against it by Messers. Khan Bahadur Hormusji Maneckji Dossabhoy Hormusji Bhiwandiwala & Co., a registered partnership firm for the recovery of a sum of Rs. 2,32,676/-. The plaintiff have filed a cross-objection in respect of that part of the claim which was dismissed by the trial court.
2. The plaintiff entered into a contract with the then Jaipur State on 17th December, 1942. Under this contract the terms of which are contained in sanction notice Ex 27, in document Ex. 28 (containing the terms, of the contract), in agreement Ex 29 which was executed after the bid of the plaintiffs was accepted and in certain other documents, the plaintiffs undertook to install distillery in the premises belonging to the Jaipur State and to supply liquor for the period from 1st July 1943 to 31st August, 1950, The outgoing contractors were M/s Karnal Distillery Ltd. the contract in whose favour was terminated. It was stated in Ex 27 that the successful bidder will instal his own distilling plant within the distillery premises at Jaipur. The following terms contained in document Ex. 28 are material for the purpose of the present case:
1. The plant will be installed within the distillery premistes at Jhotwara by the successful bidder and all works of masonry or otherwise will be done by him at his own cost.
2. He will be required to take over the buildings and the spirit waste etc. in the premises there and pay a monthly rent of Rs. 75/- p.m. therefore. The premises are open to inspection to the intending bidders.
5. The licensed contractor will have to submit a plan of the buildings and of the plant, he would erect, for the approval of the Excise Commissioner, and he will not make any additions and alterations in the existing building without obtaining his previous sanction.
6. The successful bidder will be required to obtain the work of the installation of the plant within a fortnight and complete it definitely within the period of six months. This is to count from the date the contractor is informed finally of the orders.
7. Bids are to be made for the supply of plain and spiced spirit, per 1 P. gallon, distilled from liquid molasses.
Note : The rates will be for bulk spirit ex-distillery at Jaipur, Sawai Madhopur, Sri Madhopur, Phulera and Malpura, and ex-wholesale depots at Hindaun Todaraisingh, Nainath, Bonli, Mahawa and Chaksu.
10. The licence for the manufacture of sprit and contract of supply will be for 10 years.
Note : On the termination of contract-
(a) The contract may be renewed by the Darbar for a further period to be settled, or
(b) the Darbar may purchase the plant by paying the value arrived at by arbitration, or
(c) allow the licensed contractor to sell the plant to the incoming contractor, or
(d) may allow the removal of the plant.
12. He will be required to deposit with the Darbar a sum of Rs. 10,000/- in cash or Government promissory notes or securities approved by the Darbar as securities for the due performance of the terms of his contract. Notes or other securities must before they are deposited, be endorsed in favour of the Finance Minister, Jaipur.
13. Premises are already electrified. The contractor will have to pay for the electricity consumed by him.
26. The distillery premises are close to the Railway Station, Jaipur West on the Jp. S. Railway which contain the following buildings:--
(1) Liquor godown, which has got spirit vats of the capacity of 8,000 to 10,000 gallons.
(2) Office room,
(3) Bottling room.
(4) A fermenting shed and a shed for the location of stills with pucca flooring.
(5) General store-room.
(6) A water tank at a fairly high level connected with a cell by a pipe line just outside the distillery enclosure.
(7) Drums room.
(8) Chowkidar's hut.
The term for which the contract was given to the plaintiffs was reduced to 7 years and 2 month under a subsequent agreement. A perusal of plan Ex. 159 A is necessary at this stage. All the buildings and structures mentioned in Clause 26 above are shown in this plan. Towards the north there were two sheds mentioned in Sub-clause (4) of Clause 26 of Ex. 28. The northern shed was a fermenting shed and the southern was for location of stills. The plaintiffs proposed to use the existing buildings and structures only for the purpose of installing their distillery. They accordingly submitted plan Ex. 159 A to the Commissioner, Excise & Custom. On behalf of the Jaipur Government it was suggested to the plaintiffs that the distillation plant and distillery building should be constructed between the southern shed and the spirit godown (warehouse) The evidence on record shows that the Jaipur State Government authorities asked the plaintiffs to get the distillery plant designed by the distillery technologist of the U.P. Government. The Commissioner, Customs & Excise discussed with this technologist the location and design of the distillery buildings and the following office note (Ex.11) was recorded:
I have discussed the building case of the distillery with the Distillery Technologist of the U.P. Government representing M/s. Bhiwadiwala & Co., Jaipur and have come to the conclusion that the following arrangements are essential to the plan submitted by them. This solves the question. The idea is that the State has always been at least 60 years in advance in the models and requirements of its buildings and the Jaipur P.W. D. will kindly see to this.
1. Space between the warehouse and the plant room should not be less than 60 feet.
2. There should be an office for the Inspector.
3. Separate Distribution Room with modern fittings should be provided.
4. Lavatory should be provided.
5. Laboratory should be provided.
6. Two Inspectors quarters with 12 menial staff and two clerks to be provided.
7. It is understood that modern arrangements for the proper gauging of the bigger vats will be made.
8. Modern bottling and washing plant near the bottling room.
9. Provision for the Railway siding.
Ex. 100 A is the revised general plan. Exs. 110 B and C are the detailed plans of the new constructions which were to be made. These plans were approved by the Mahkma Khas of the then Government of Jaipur. The plaintiffs obtained the distillery plant and installed it in the buildings constructed by them. Up to 1947 the Government of UP used to issue suit permits for the purchase of molasses from the sugar factories and the plaintiffs were to obtain regular supplies for manufacturing liquor in this distillery; The U P. Government charged an export duty of one rupee per maund for these permits. In 1948 the molasses were decontrolled and the Indian Sugar Syndicate Ltd. used to sell the molasses on behalf-of all the sugar factories in U.P. It has come in evidence that the agent of the plaintiffs wanted a letter from the Jaipur Government to help him in obtaining molasses for the distillery of the plaintiffs in Jaipur. The Government of Jaipur declined to give any such letter to the plaintiffs. Their case is that they were unable to obtain molasses and had to stop the manufacture of liquor in the distillery much before the termination of their contract.
3. After the termination of the contract the plaintiffs requested the Government of Rajasthan to purchase the plant, machinery and buildings installed by them in the distillery premises under the note to Clause 10 of document Ex. 28. After several reminders the Commissioner of Customs & Excise Rajasthan informed the plaintiffs in his letter Ex. 24 No. 418 Ex. 1/265 on 3rd July 1952 that the matter was under the consideration of the Government. The Commissioner visited the distillery and inspected the buildings and plants. He granted an interview to the manager of the plaintiffs in this connection. But the Government did not either purchase the buildings plant etc. nor informed the plaintiffs that it had decided not to purchase them. On 29 10.53 the plaintiff filed the present suit. Their case in the plaint is that under the note to Clause 10 the Government, were bound to purchase the buildings, plant, etc. The following issue No. (1) was framed on this point:
Whether there was any agreement between the parties with regard to the purchase of the distillery buildings, plant, machinery and other equipment erected or installed by the plaintiffs, on the expiry of the term of the lease granted by the defendant to the plaintiffs?.
Subsequently on the request of the plaintiffs the following additional issue was framed:
(1)(a) In the alternative, did the plaintiffs construct the distillery building at the request and with the sanction of the former Government of Jaipur? If so, what is its effect on the suit?.
4. On behalf of the State it was pleaded that the Government were not bound to purchase the buildings, plant, machinery and other equipment under the terms of the agreement. With regard to the buildings the specific case of the Government was that they were constructed for installing the distillery plant and are covered by Clause 5 of document Ex. 28 which makes it clear that they will be constructed by the contractor at his own cost.
5. The trial court framed the following two points to decide the question as to whether the defendant is bound to purchase the plant from the plaintiffs in the circumstances of the present case:
1. Whether item (d) of the note in condition 10 is not an option to the defendant and the defendant cannot ask the plaintiffs to remove the plant?
2. Whether the defendant exercised the alleged option and allowed the plaintiffs to remove the plant? If not is the defendant not bound to purchase the plant?
On point No. 11 the finding of the trial court was that the defendant had every right to ask the contractor to remove the plant on the termination of the contract.
6. We are in agreement with this finding. The defendant was not prepared to renew the contract. It did not decide to purchase it by arbitration. There was no incoming contractor after the plaintiffs. In these circumstances the defendant should have allowed the plaintiffs to remove the plant. The defendant did not tell the plaintiffs to remove the plant because it did not make up its mind finally as to whether it would purchase the plant or not. The defendant did not disallow the plaintiffs from removing the whole or any part of the plant. It may be mentioned here that after the institution of the present suit, during the pendency of it, the plaintiffs removed the following items mentioned in schedule A attached to the plant:
1) Item No. 1 Lancashire Boiler.
2) Item No. 2 copper steamheated postill complete.
3) Item No. 4 eight wooden fermenting vats.
4) Item No. 12 Bottling machine.
5) Item No. 18 Laboratory Equipment.
6) Item No. 19 Weighing scale.
7. Shri Keki Dumasia, the manager of the plaintiffs who was examined as a witness stated:
We did not take any article without the permission of the Government after the institution of the suit.
8. We infer therefore that if other articles had also been removed the Government would not have raised any objection Shri Dumasia stated that the plaintiffs did not like to remove the remaining articles shown in schedule 'A'. On the second point the trial court was of the opinion that it was for the defendant to have asked the plaintiffs to take away the plant if it did not want to purchase it and as it kept on telling the plaintiffs that the purchase of the plant was under consideration and delayed the matter for, so long the defendant is now bound to purchase the plant.
9. As we have mentioned above, the plaintiffs requested the defendant to purchase the plant after the termination of their licence and issued several reminders. For a long time no reply was sent to the plaintiffs. On 3rd July 1952 the Commissioner, Customs & Excise wrote letter Ex. 24, No. 418/ Ex. 1/255 that the question of purchasing the plant was under the consideration of Government. It may be mentioned here that in this connection that the Commissioner had vested the distillery and inspected the buildings erected by the plaintiffs and their plant. Shri Dumasia, the manager of the plaintiffs also saw the Commissioner by appointment on 24.12.52 in this connection. The Commissioner told the plaintiffs that he would obtain Government orders, as to whether the plant could be purchased by the defendant or not. The Excise Minister also granted an interview to the plaintiffs on 3rd June 1953 and discussed the question of purchasing the plant and buildings with them. He asked them to send another letter asking the Government to purchase the buildings and plant. The plaintiffs then filed a fresh application Ex. 91 before the Excise Minister on 30.6.1953.
10. The Secretary to the Government in Excise Department called the plaintiffs to see him in his office on 13.8.53. Nothing fruitful came out of it 2nd the plaintiffs eventually served notice Ex. 96 dated 28 8.53 on the defendant under Section 80 C.P.C. demanding the price of Rs. 5,83,304.12-9.
11. The trial court gave the following reasoning for coming to the conclusion that the defendant was bound to purchase the plant in the circumstances of the present case.
All the above correspondence clearly established beyond doubt that the defendant did not exercise the option of item No. 4 of note under condition 10 of the terms, and did not ask the plaintiffs to remove the plant., Had the defendant allowed the plaintiffs to remove the plant at the termination of the contract the stand of the defendant in all the correspondence should have been different. The defendant's assertion in written para 17 that the defendant exercised the last alternative to allow the removal of the plant, therefore it is not established and it is clear from all the above correspondence that the defendant did not exercise the said option and did not intimate the plaintiffs that they were at liberty to remove the plant on the termination of the contract. On the contrary the correspondence established beyond doubt, that the plaintiffs all along requested the Government to purchase or take over their plant for the valuation to be arrived at by arbitration and the Government in not deciding their case and keeping it for consideration for such a long period for nearly about three years allowed the plaintiffs to assume that the Government was considering to purchase the plant. Under these circumstances the defendant, in my opinion, is bound to purchase the plant for value as per express term contained in item (d) of note in condition 10 of the terms.
12. We are of the opinion that the above reasoning is fallacious. It was open to the Government to purchase the plant or not to purchase it. In case the Government did not opt to purchase the plant, as in the present case, it should have communicated its decision to the plaintiffs within a reasonable time and asked them to remove the plant. But because they did not do so it cannot be held that the defendant became bound to purchase the plant. All that this Court can do is to compel the defendant to allow the plaintiffs to remove the plant.
13. As the defendant had the option to purchase the plant, the plaintiffs were bound to ascertain from the Government whether it would exercise that option. The plaintiffs could not have removed the plant till the defendant told them that it would hot purchase it. On account of the fact that the State did not decide the case and kept it for consideration for such a long period of nearly 3 years the plaintiffs were prevented from removing the plant. They had to keep the plant on the premises till the Government made up its mind. The defendant is liable to compensate the plaintiffs for damages arising from the fact that the plant had to be kept on the premises for such a long time. The measure of the damages is the amount of expenditure which the plaintiffs reasonably and necessarily incurred in guarding the plant and preserving it on the distillery premises. This question will be dealt with under issue No. 6.
14. We are accordingly of the opinion that the defendant is not bound to purchase the plant.
15. Coming now to the question regarding the buildings erected by the plaintiffs on the distillery premises it was mentioned in auction notice Ex. 27:
The successful bidder will install his own distilling plant within the distillery premises at Jaipur.
16. A perusal of Clauses 1, 2, 5 and 26 goes to show that the contractor was expected to install the plant in the distillery premises. He was to make use of the existing building for which he was to pay a rent of Rs. 75/- per month. If he needed any other building for, installing the plant and for manning it he was to construct it at his own cost under Clause 1 and Clause 5. There was a rider attached that no additions or alterations could be made without obtaining the previous approval of the Government.
17. As we have already pointed out above, the plaintiffs submitted plan Ex. 158 A at first. They proposed to utilise the existing buildings and structures. They wanted to instal the plant in the southern shed after adding to it a boiler house and other necessary buildings. This was not approved and it was suggested to them that they should instal the plant between the southern shed and the warehouse. It was also suggested to the plaintiffs that they should obtain the services of the Distillery Technologist of the U.P. Government. The plaintiffs accepted this suggestion and obtained his services. The Excise Commissioner discussed the question of buildings with him and note Ex. 11 was the result of this discussion. Amongst other things the Commissioner suggested that there should be an office for the Inspector and a separate room for laboratory. He also suggested a modern bottling and washing plant near the bottling room and a separate distribution room with modern fittings.
18. We are of the opinion that it was open to the plaintiffs to accept all the suggestions which were made or not to accept, under the contract. The suggestions which were made by the Excise Commissioner in note Ex.11. the trial court held that the construction of these buildings was not covered by the agreement and that the buildings constructed do not fall under Clause 5 of the agreement and that the Government is bound to pay: compensation for the buildings constructed by the plaintiffs for installing the the distillery etc. under Section 70 of the Contract Act. We are unable to agree with the findings of the trial court op this point. Section 70 of the Contract Act runs as follows:
Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit, thereof, the latter is bound to make compensation to the former in respect of or to restore, the thing so done or delivered.
19. In our opinion one of the essential ingredients of Section 70 is 'whether a thing is done for another person. The plaintiffs would have been entitled to recover the cost of the buildings from the defendant only if at the time of constructing them they thought that they were constructing the buildings for the Govt. which would pay for them. That was clearly not the case here. If the plaintiff intended that the Govt. would pay for the buildings, they would have asked the defendant to pay for them as soon as they were completed. This was not done. The attention of Shri Dumasia was drawn to this in cross-examination. He stated in reply:
When a permanent structure and a plant had been erected, it had to be taken over by the incoming contractor.
20. It is clear from the above statement that the plaintiffs never thought that the Govt. would pay for the buildings which they erected at its suggestion to install the plant and for running it. It is true that the officers of Govt. suggested to the plaintiffs to make a more elaborate building than was necessary and the plaintiffs accepted the suggestions. They will be de deemed to have accepted them voluntarily and to have constructed the building beyond what was strictly required under the contract voluntarily.
21. It cannot therefore be said that the buildings were made for the defendant within the meaning of Section 70 of the Contract Act. The plaintiffs are therefore not entitled to recover the cost of the buildings from the defendant.
22. The plaintiffs will however be entitled to remove the building material.
23. Now we come to issue No. 6 which runs as follows:
Are the plaintiffs entitled to recover from the defendant the salary paid by them to their staff at the distillery building from 1.9.1950 to 31.10.53 amounting to Rs. 27,857.80 and thereafter till the defendant takes over the building, plant, machinery, equipments etc. 700/- per month?.
24. A sum of Rs. 27,867.80 was claimed as having been spent over the insurance and the maintenance of staff from 1.9.1950 to 29.10.53. The licence expired on 31.8.1950 and the suit was filed on 29.10.53. For reason which we have given above the plaintiff are entitled to necessary and reasonable expenses for guarding the plant and the buildings from the date of the expiry of the licence till the institution of the suit. After serving notice under Section 80 C.P.C. and the expiry of the period of that notice, the plaintiffs should have removed the plant as the defendant had failed to exercise its option and there was no other alternative left to the plaintiffs but to remove the plant. Even after the notice under Section 80 C.P.C. was served on the defendant the plaintiff were not told that they could remove the plant. They are therefore entitled damages up to the date of the institution of the suit.
25. It has been proved satisfactorily that the plaintiffs paid a sum of Rs. 6,8553.0 as insurance premia for the buildings and plant for this period vide receipts Exs. 1468 to 1461.
26. No evidence has been produced as to what other staff was engaged. In the absence of such evidence it cannot be said whether it was reasonable to engage so much staff after the expiry of the licence merely to ensure the safety of the plant and the buildings. We consider the entertainment of two Chowkidars sufficient in view of the fact that the buildings and the plant were insured against fire and riot. The average salary of a Chowkidar in these days was Rs. 50/- per month. We allow a sum of Rs. 3,800/- in addition to the insurance amount.
27. We accordingly allow a sum of Rs. 10,655-3-0 to the plaintiffs under this issue. We modify the finding of the trial court on this issue. It may be mentioned that the trial court allowed a sum of Rs. 27,737-2-0 under this issue.
28. Next we come to issues No. (3) and (7) which relate to the refund of the security deposit of Rs. 10,000/- with interest thereon. The plaintiffs made a security deposit of Rs. 10,000/- under Clause 12 of documents Ex. 28 which contains the terms of the contract. The case of the plaintiffs was that they became entitled to the refund of the security money on the termination of their licence on 31.8.50, but the Government refused to refund the amount depsite repeated demands. The defendant took the plea that the plaintiffs had committed a breach of contract and therefore the security stood forfeited. The following issues were framed:
(3) Are the plaintiffs disentitled to the refund of the security deposit of Rs. 10,000/- on the ground that their work was unsatisfactory or that they failed to implement the terms of the contract?
(7) Are the plaintiffs entitled to interest on the deposit amount of Rs. 10,000/- from 1.9.60 onwards? If so, at what rate?
29. The trial court held that the plaintiffs did not commit any breach of contract, that they became entitled to the refund of the security money on 1950 and that because this amount was with held without any reason they are entitled to interest at 6 per annum simple from 1 9.50 till realisation. The amount of interest upto the date of the suit comes to Rs. 1,900/-
30. We have perused the evidence on record. We find that the plaintiffs were unable to supply the liquor as per terms of their contract on account of some difficulties of transport etc. An agreement Ex. 52 dated 4.4.47 was arrived at between the parties under which the past failure to perform the contract on the part of the plaintiffs was condoned. The defendant has not proved that after the date of this agreement any breach of contract was committed by the plaintiffs. Apart from this no action was taken by the State Government for forfeiting the part of the security during the the continuance of the licence. We are accordingly satisfied that the trial court rightly ordered the refund of security with interest. We accordingly confirm the findings of the trial court on issues (3) and (7).
31. Next we come to issues (4) and (5) which run as follows:
(4) whether the defendant was bound under the contract with the plaintiffs to arrange for the supply of molasses and plaintiffs were prevented from carrying out the contract on account of the neglect and failure of the defendant form January 1949 to August, 1950, to grant necessary permits and facilities to the plaintiffs for import of molasses?
(5) If issue No. 4 is decided in favour of the plaintiffs, are the plaintiffs entitled to recover Rs. 1,50,000/- or any other lesser amount by way of damages from the defendant?
32. The trial court decided these issues against the plaintiffs. We have perused the evidence on record and we agree with these findings.
33. The case of the above issues is contained in paras 7 and 12 of the plaint. Letters Ex. 112 to Ex. 135 have been filed by the plaintiffs which were exchanged between them and their agent for purchasing molasses whose name was Purushottam Das. Purshottam Das was examined as P.W. 5 The evidence on record goes to show that prior to 1948 molasses were exported on permits issued by the U.P. Government on payment of rupee one per maund of molasses. Till then the plaintiffs were able to obtain molasses for their Jaipur distillery without any difficulty. In the beginning of 1948 a decision was taken to remove the ban on the export of molasses. This ban was removed in 1948. It has not come in evidence on what date or in what month the ban was removed. After the removal of the ban the molasses were to be sold through the Indian Sugar Syndicate Ltd. U.P. by the sugar factories in that State. The correspondence on record shows that it was not clear to the plaintiffs or their agent in the beginning whether the U.P. Government will recover any export duty after the removal of the ban on export. The rate at which the molasses would be sold was also not known. Ultimately it was found out that no export duty could be levied by the U.P. Government on the export of molasses from UP and that they will be sold at the rate of Rs. 1.8-0 per maund, by the sugar syndicate. Prior to the fixation of this rate the agent of the plaintiffs was under the impression that the U.P. Government will fix the price of molasses. He accordingly asked the plaintiffs to get a letter of recommendation from the Jaipur Government addressed to the Government of U.P. We are satisfied that no letter of recommendation from the Jaipur Government was necessary for the purchase of molasses from the Indian Sugar Syndicate Limited. U.P. In this connection we may refer to letter Ex. No. 184 dated 17.1.49 from Purshottam Das to the plaintiffs.
34. Further we agree with the trial court that the under the terms of the contract there was no duty cast on the defendant to assist the plaintiffs in obtaining molasses from U.P. The plaintiffs are therefore not entitled to any damages under the above two issues. We may mention here that although the plaintiffs claimed a sum of Rs. 1,50,300/- as damages under the above issues no evidence what so ever was given as to how this loss was incurred by them.
35. We agree with the finding of the trial court about the existence on the date of suit and the fair market price of the items of plant, machinery and accessories as mentioned in its judgment. These shall bind the executing court when the question of execution of this decree comes up.
36. No other point was argued by the learned Counsel for the parties.
37. The result is that we allow D.B. Civil Regular First Appeal No. 49/1964 in part. We set aside the decree for Rs. 2,32,676/- passed in favour of the plaintiffs by the trial court. Instead we decree the folio wing amounts in their favour:
Rs. 10,000/- under issue (3)
Rs. 1,900/- under issue (7)
Rs. 10,655.3.0 under issue (6)
Total Rs. 22,565-30
38. The plaintiffs are entitled to get interest at 6% per annum simple on the sum of Rs. 10,000/- from the date of the suit to the date of realisation.
39. We direct the defendant to allow the plaintiffs to remove the items of plant and machinery including accessories which were in the distillery premises on the date of the suit but were not removed by the them. We also direct the defendant to allow the plaintiffs to remove the material of the buildings and structures erected by them at their cost. This removal should take place within a period of six months.
40. The above articles and material should be removed by executing the decree of this Court. If any article mentioned in the schedule and valued by the trial court is not found on the permises the plaintiffs will be entitled to recover its depreciated value as determined by the trial court from the defendant.
41. In view of our finding above the cross-objection is dismissed.
42. Having regard to the circumstances of the case, we leave the parties to bear their own respective costs of this Court and of the trial court.