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Athimannil Muhammad Vs. the Malabar District Board - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai
Decided On
Reported inAIR1935Mad213; 155Ind.Cas.291; (1935)68MLJ125
AppellantAthimannil Muhammad
RespondentThe Malabar District Board
Cases ReferredIn Bhagchand Dagdusa v. Secretary of State
Excerpt:
- - 242. the real test is whether what is complained of is some act done in pursuance of the statute. 242 is itself sufficient to show the difficulties in the way of attempting anything like an exhaustive definition or clear cut differentiation of the cases falling under the section and of cases not falling under the section. both lord haldane and lord shaw emphasise the impossibility of framing anything like a general test. in the view that the present action is clearly within the terms of section 225, clauses (i) and (iii) of the local boards act, the suit must fail on the ground that it has been instituted more than six months after the accrual of the alleged cause of action......(1914) 28 m.l.j. 147 and bradford corporation v. myers (1916) a.c. 242. this distinction between actions on contracts and actions independent of contracts may be convenient enough as a working rule, but we do not think it can be said to represent accurately the basis of the applicability of the rule. this was realised by jenkins, c.j., even in the ranchordas moorarji v. the municipal commissioner for the city of bombay i.l.r. (1901) 25 bom. 387 and is emphasised by lord shaw in bradford corporation v. myers (1916) a.c. 242. the real test is whether what is complained of is some act done in pursuance of the statute. in cases where there is no dispute as to the existence of a contract, all further rights and liabilities between the parties are governed by the ordinary law relating to.....
Judgment:

1. We have heard arguments, on this appeal, only on the question raised by issue No. 2, namely, whether the suit is barred under Section 225(3) of the Madras Local Boards Act, as it has admittedly been instituted more than six months after the accrual of the alleged cause of action. As we agree with the lower Court in its conclusion on this point, it is unnecessary to deal with the other issues arising in this case.

2. The plaintiff filed this suit, claiming damages from the District Board of South Malabar, on the ground that by order, dated 31st of March, 1925, the President improperly cancelled a contract with the plaintiff whereby the plaintiff had been given the lease, for one year, of the tolls in certain places in the Malabar District. The material facts are, that, pursuant to an invitation of tenders, the plaintiff made a tender on the 23rd of March, 1925, which was accepted by the Vice-President, during the President's absence, on the 24th of March. The President seems to have left directions that the papers relating to the lease of tolls should be placed before him and he was, therefore, apparently of opinion that the acceptance by the Vice-President was not authorised. He also seems to have found that there was another contractor who offered a much larger amount in respect of the same toll-gates. He naturally accepted the tender of the other man and as a necessary result cancelled the acceptance of the plaintiff's tender. Both these subjects are embodied in one order of the President (See Exs. III and V). The question for consideration under Issue 2 is whether or not the action is in respect of ' any act done or purporting to be done in pursuance of execution or intended execution of the Act.'

3. On behalf of the appellant, Mr. Narayanaswami Aiyar has contended that several cases have held that this provision does not apply to cases arising out of breach of contract but is limited to liabilities arising out of the execution of or the omission to execute statutory duties of such bodies. Reference may, in this connection, be made to Mayandi v. Mc. Quhae I.L.R. (1878) Mad. 124. The President, District Board, Malabar v. Kenti Kanaran (1906) 17 M.L.J. 7 390, Ranchordas Moorarji v. The Municipal Commissioner for the City of Bombay I.L.R.(1901) 25 Bom. 387, Municipal Council, Kumbakonam v. Veeraperumal Padayachi (1914) 28 M.L.J. 147 and Bradford Corporation v. Myers (1916) A.C. 242. This distinction between actions on contracts and actions independent of contracts may be convenient enough as a working rule, but we do not think it can be said to represent accurately the basis of the applicability of the rule. This was realised by Jenkins, C.J., even in the Ranchordas Moorarji v. The Municipal Commissioner for the City of Bombay I.L.R. (1901) 25 Bom. 387 and is emphasised by Lord Shaw in Bradford Corporation v. Myers (1916) A.C. 242. The real test is whether what is complained of is some act done in pursuance of the statute. In cases where there is no dispute as to the existence of a contract, all further rights and liabilities between the parties are governed by the ordinary law relating to contracts, and it is true enough, in such case, to say that the rights and liabilities of the parties in respect of the contract are matters of ordinary law and not matters governed by the statute. But where, as in the present case, we find that the cancellation of the acceptance of the plaintiff's offer is the necessary result of what the President thought, in accordance with the terms of the Act as he interpreted them his duty to accept, viz., the highest tender - and he did this on the footing that the Vice-President's acceptance of the plaintiff's tender is not a compliance with1 the Act - we cannot say that the question does not relate to an act done under the statute. The right to levy tolls is a special privilege conferred by the statute upon local bodies and under the terms of Section 106(1), Local Boards are authorised either to manage the collection of the tolls themselves or through their own agency or to lease them out. In either case what the President as representing the Board does in connection with the leasing out of the right to levy tolls is undoubtedly an act done in execution of his powers or duties under the Act.

4. The discussion in Bradford Corporation v. Myers (1916) A.C. 242 is itself sufficient to show the difficulties in the way of attempting anything like an exhaustive definition or clear cut differentiation of the cases falling under the section and of cases not falling under the section. Lord Buckmaster, L.C. for instance, emphasises the distinction between an incidental power to trade and a direct duty to trade, even in cases where a statutory body is authorised to trade and the Lord Chancellor was of opinion that anything falling under the second head will be governed by the provisions of the Act. Both Lord Haldane and Lord Shaw emphasise the impossibility of framing anything like a general test. The question must depend upon the circumstances of each case, and for the reasons already given, we hold that the present case is within the terms of Section 225(1) of the Local Boards Act. In Municipal Council, Kumbakonam v. Veera Perumal Padayachi (1914) 28 M.L.J. 147. Mr. Justice Napier takes care to point out that, in the case then before the Court, the contract was not of such a character as must necessarily arise out of statutory powers given to the local body. The same cannot be said of the contract here. In Bhagchand Dagdusa v. Secretary of State for India (1927) L.R. 54 IndAp 338; I.L.R. 51 Bom. 725 : 53 M.L.J. 81 the Privy Council, in dealing with a similar provision - Section 80, Civil Procedure Code - pointed out that if a particular action falls within the language of the statute, it is not for the Court to canvass the policy or even the expediency of interfering with a person's right of action, by such a restrictive provision. In the view that the present action is clearly within the terms of Section 225, Clauses (i) and (iii) of the Local Boards Act, the suit must fail on the ground that it has been instituted more than six months after the accrual of the alleged cause of action. The appeal is, therefore, dismissed with costs.


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