1. Ex. P. 1 is the contract of service which the resp., the Dist. Board, Salem, & the pitf.-applt. entered into for the employment of the pltf. as the medical officer in charge of a rural dispensary for a period of three years. The pltf. was first posted to Elachipalayam as medical officer of the rural dispensary there. On 3-6-1941, the services of the pltf, were terminated (vide Ex. P. 4). On appeal to the Govt. the pltf. was reinstated in service on 31-12-1941. He was out of office between 3-6-1941 & 31-12-1941.
2. The pltf. folld. up his reinstatement by instituting the suit out of which this second appeal arises. He claimed Rs. 287-7-0 by way of subsidy from deft. 2, Rs. 338-11-0 by way of damages from deft. 1 the Dist. Board, &, in the alternative, the entire sum of Rs. 626-2-0 as damages from deft. 1, the District Board. The trial Ct. held that the dismissal of the pltf. was wrongful; but the learned Dist. Munsif upheld deft. 1's contention, that the suit was barred by Section 225, Madras Local Boards Act, as it had been instituted more than six months from the date on which the cause of action arose. The pltf.'s suit was dismissed. At the stage of appeal, deft. 1, District Board accepted the correctness of the finding of the trial Ct. that the dismissal of the pltf. was wrongful. The only question that the learned Dist. 3. considered was whether Section 225, Madras Local Boards Act, was a bar to the pltf's claim. The learned Dist. J. agreed with the learned Dist. Munsif on that issue & the appeal was dismissed. The second appeal has been preferred by the pltf. & the only resp. in the second appeal Is the District Board.
3. The main contention of the learned advocate for the applt. was that Section 225, Local Boards Act & the special period of limitation prescribed there under did not apply to a suit to enforce contractual obligations incurred under a contract entered into by the District Board & a person like the pltf.
4. Section 225 runs:
'1. No suit or other legal proceedings shall be brought against any local Board..... .in respect of any act done or purporting to be done in execution or intended execution of this act or any rule, by-law, regulation or order made under itor in respect of any alleged neglect or default in the execution of this act or any such rule, by-law, regulation or order until the expiration of two months next after notice In writing....
2. Every such proceedings shall, unless it is a proceeding for the recovery of immovable property or for a declaration of title thereto, be commenced within six months after the date on which the cause of action arose.'
The learned Dist. J. seems to have based his decision in this case that Section 225 applied to the pltf's claim, or. 'Athimannil Muhammad v. Malabar Dist. Board', 58 Mad 746: AIR 1935 Mad 213. 'Varadachariar J. observed at p. 749 thus :
'The real test is whether what is complained of is some act done in pursuance of the statute. Incases where there is no dispute as to the existence of a contract, all further rights & liabilities between the parties are governed by the ordinary law relating to contracts; & it Is true enough, in such a case, to say the rights and liabilities of the parties in respect of the contract are matters of ordinary law & not matters governed by the statute. But where, as in the present case, we find chat the cancellation of the acceptance of the pltf.'s offer is the necessary result of what the President thought, in accordance with the terms of the Act as he interpreted then, his duty to accept, viz., the highest tender........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, &, 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.'
The scope of the principles which underlay the actual decision in 'Athimannil Muhammad v. Malabar District Board', 58 Mad 746 : AIR 1935 Mad 213 was discussed by Beasley C. J. in 'Narasimhadas v. District Board, Kistna : AIR1938Mad239 . Referring to the claim in 'Athimunnil Muhammad v. Malabar District Board', 58 Mad 746: AIR 1935 Mad 213, Beasley C. J. observed :
'There, the suit was filed..... .claiming damageson the ground that its President Improperly cancelled a contract of lease......The president inperformance of what he thought was his duty under the Madras Local Boards Act, as he interpreted the same, accepted a higher offer by an other person & the cancellation of the acceptance of the original offer was the necessary result......'
The claim Beasley C. J., had to adjudicate upon was for the recovery of the balance of an amount due to the pltf. under a contract made with the District Board. Applying the rule which is formulated In 'Athimannil Muhammad v. Malabar District Board', 58 Mad 746: AIR 1935 Mad 213, Beasley C. J. was of opinion that the claim based upon the contract, that is, upon a breach of the contract, was outside the scope of Section 225, Madras Local Boards Act. In reaching that decision, Beasley C. J. relied upon a decision of Venkataramana Rao J. in 'C. R. P. 1913 of 1934'.
5. Varadachariar J. himself, who delivered the judgment in 'Athimannil Muhammad v. Malabar District Board', 58 Mad 746: AIR 1935 Mad 213 held in 'Sivasankaram v. Taluk Board, Penu-konda : AIR1936Mad945 .
'The provision for notice in Section 225 as well as the enactment of a shorter period of limitation are co-extensive except as regards suits for immovable property. There is always a distinction between the cases in which notice is necessary under Section 225 & the cases in which notice is not necessary. Where on the allegations in the plaint, the suits do not arise out of anything done by the Board in the discharge of a statutory duty, the suits are maintainable without issue of notice & are not barred by limitation under the special provisions of Section 225.'
In that case, the claim was for reimbursement under an arrangement agreed to by the Taluk Board of Penukonda to pay the pltf the expenses incurred by him In certain contemplated proceedings. The claim was on the basis of a breach of the contract.
6. It may be recalled that In 'Athimannil Muhammad v. Malabar District Board', 58 Mad 746 : AIR 1935 Mad 213 it was a statutory right that the President exercised--a statutory liability that he discharged in entering into a contract of lease for the collection of tolls. The contract Varadachariar J. had to consider in 'Siva-sankaram v. Taluk Board, Penukonda : AIR1936Mad945 was obviously not such a contract; nor is the contract, Ex. P. I we have to consider in these proceedings such a contract. True under Sen. V, Rule 1 (A) h), Local Boards Act, the President had a right to maintain dispensaries. But, in the maintenance of dispensaries, if he chose to employ a medical officer & chose to enter into a contract with him it might be ultimately to discharge his liability & exercise the right conferred upon the President by Clause (h) of Rule 1 (A) of Schedule V. But such a contract was only incidental to the discharge of that liability & the exercise of that right by the President. The contract itself was not entered into in the exercise of any specific direction to that effect in the statute. In 'District Local Board, Poona v. Vishnu Raghoba. : AIR1933Bom164 Patkar J. pointed cut with reference to a similar contract that
'the performance of the contract is only Incidental to the statutory powers of the Local Board.'
That, it seems to me, is the real distinction. Where he contract is entered into in the direct exercise if a statutory power by the President it would come within the scope of Section 225. That was what was really decided in 'Athimannil Muhammad v. Malabar District Board', 58 Mad 746: AIR 1935 Mad 213. But where the contract is only incidental to the exercise of a statutory power, he claim based upon such a contract will not be hit by the special statutory restrictions embodied in Section 225, Local Boards Act. That was really the basis on which 'Sivasankaram v. Taluk Board, Penukonda : AIR1936Mad945 & 'Narasimhadas v. District Board, Kistna : AIR1938Mad233 were decided & it was on analogous principles that 'Dist. Board, Poona v. Vishnu Raghoba', : AIR1933Bom164 was decided. It is unnecessary to go further back & refer to 'Municipal Council, Kumbakonam 'v. Veeraperumal Padayachi', 28 ML J 147: AIR 1916 Mad 310 or 'Mayandi v Me Quohae', 2 Mad 124.
7. The learned Dist. J. referred to 'Veera Subramanyam v. President, District Board, Narasapur' : AIR1941Mad733 ; but that did not deal with a claim based upon any contract. It was a fatal accident that was complained of & that constituted the basis of the claim. The contention of the learned Advocate for the applt. that the learned Dist. J. misconstrued the scope of 'Athimannil Muhammad v. Malabar District Board', 58 Mad 746. AIR 1935 Mad 213 is well-founded. The learned Dist. J.'s attention does not appear to have been drawn to 'Sivasankaram v. Taluk Board, Penukonda : AIR1936Mad945 .
8. I reverse the finding of the learned Dist. J. & also that of the learned Dist. Munsif on the question of limitation. The decree of the lower appellate Ct. is set aside & the appeal is remanded for disposal afresh. The other questions for determination will have to be dealt with.
9. The learned advocate for the resp. pointed out that Clause 13 of Ex. p. 1 barred by itself a suit where the final decision had been given on the questions at issue between the parties, that is, the pltf. & deft. 1 by the Govt. Whether that contention is well-founded or not will also be one at the points for the lower appellate Ct. to decide.
10. The second appeal is allowed & the appeal is remanded to the lower appellate Ct. for disposal in the light of the observations made above. Costs in this appeal will abide the result & will Be costs in the cause.
11. The Court-fee paid on the memo, of the second appeal will be refunded.
12. C. M. P. No. 2093 of 1949' : This is an appln. to admit additional evidence in the second appeal. It does not, however, arise. The applt., if so advised, may apply to similar effect when the appeal comes on for hearing afresh before the lower appellate Ct.
13. The petn. is dismissed.