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The Madras Engineering Works Ltd. Vs. the Municipal Coucil - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in97Ind.Cas.511
AppellantThe Madras Engineering Works Ltd.
RespondentThe Municipal Coucil
Excerpt:
madras district municipalities act (iv of 1884), section 44, 45 - contract with municipal council not in conformity with section 44, whether enforceable--contracts relating to daily duties. - - this quotation is subject to the usual strike clause failure in transport or any other unforeseen circumstance over which we have no control. it is perfectly clear that at the date that letter was written, the plaintiff had no right whatever to attempt to maintain that they were entitled as of right to have these extra charges, but no answer was given and the matter dragged on! then i think they were entitled to say to the council, we have failed to deliver in time. but that plea is not well-founded because at the time when if at all this agreement was concluded, the contract was gone as i have..........trotter, c.j.1. this is a suit brought by the madras engineering works, limited, against the municipal council of trichinopoly. the plaintiff company tendered in december, 1919, forthesupply to the council of two boilers for the purpose of their water works, and on the 19th january, 1920, they tendered at the price of rs. 9, 145 per boiler free on rail madras, and they conclude the letter by which they forward the quotation thus:'this quotation is subject to the usual strike clause failure in transport or any other unforeseen circumstance over which we have no control.' they also state that delivery was to be within five months. that tender was accepted by the council and the acceptance was notified by a letter from mr. o'brian, the chief inspector of steam boilers in madras, who.....
Judgment:

Victor Murray Coutts Trotter, C.J.

1. This is a suit brought by the Madras Engineering Works, Limited, against the Municipal Council of Trichinopoly. The plaintiff company tendered in December, 1919, forthesupply to the Council of two boilers for the purpose of their water works, and on the 19th January, 1920, they tendered at the price of Rs. 9, 145 per boiler free on rail Madras, and they conclude the letter by which they forward the quotation thus:

'This quotation is subject to the usual strike Clause failure in transport or any other unforeseen circumstance over which we have no control.' They also state that delivery was to be within five months. That tender was accepted by the Council and the acceptance was notified by a letter from Mr. O'Brian, the Chief Inspector of Steam Boilers in Madras, who was obviously acting as agent for the Council with regard to the arrangement about these boilers. The boilers were not delivered in time, and taking the contract as being concluded on the 7th of February we may have been in default some time towards the end of July.

2. Meanwhile, the Engineering Company wrote on the 5th of July 1920 again addressing Mr. O'Brian a letter in which they state that the estimate which has been accepted 'was prepared on a basis of exchange of Schedule 2/2 and was also subject to the usual freight, transport or unforeseen circumstances over which we have no control.' They say that they were told from England that the prices had advanced 10 per cent, and they raise the question of exchange. It is perfectly clear that at the date that letter was written, the plaintiff had no right whatever to attempt to maintain that they were entitled as of right to have these extra charges, But no answer was given and the matter dragged on! As I have already said, by the end of July to take a liberal interpretation of the term 'about five months' which appears in the contract, somewhere about the end of July or the beginning of August, the plaintiff company would be in default. Then I think they were entitled to say to the Council, 'We have failed to deliver in time. You have your remedies against us if you choose to pursue them for that default of ours. Or if you will agree to pay the extra charges that we asked for at the time when we were not entitled to ask for them, then we will, notwithstanding that the contract is technically at an end by breach, nevertheless, deliver these boilers at an enhanced rate.' In other words to make a new contract with the Council. I have not heard the evidence which I was to have heard from Mr. Wilson and Mr. O'Brian on behalf of the plaintiff company; 1 have only read the correspondence and the pleadings. But it is extremely probable from the language used in the correspondence that Mr. O'Brian acting on behalf of the Council, did agree to the enhanced price. That, I think, is strongly suggested by the letter of the 31st August 1920 from Mr. O'Brien to the Chairman of the Municipal Council in which he speaks of the slight extra cost being one that will be soon recovered by the reduction in fuel consumption. The plaintiff company by a letter of Mr. Wilson, the Managing Director, dated the 3rd September 1920, tell the Chairman of the Council that he was wise in adopting the course which he had decided upon. The boilers were duly delivered and the Municipal Council has had the benefit of them ever since. When they were pressed for payment they declined to pay any more than the original contract price.

3. A point was taken by the Council in their pleading that there was no consideration for the enhanced price because the only consideration that could be supposed to exist was an abstention by the Engineering Works from a breach of their contract which of course, is in law no consideration at all. But that plea is not well-founded because at the time when if at all this agreement was concluded, the contract was gone as I have already pointed out.

4. But it seems to me that there is a more fatal objection to the plaintiff's suit than any of these Sections 44 and 45 of the District Municipalities Act of 1884, the Act which was in force at the time this contract was entered into. It is laid down by Section 45 'Every contract made by, or on behalf of, a Municipal Council, whereof the value or amount exceed Rs. 100 shall be in writing, and, shall be signed by two Municipal Councillors, one of whom shall be the Chairman or Vice Chairman' and by Section 45 'A contract executed or made otherwise than in conformity with the provisions of this and the last preceding Section shall not be binding on the Municipal Council.' In England the provision that Corporations should contract in a special manner, namely, under seal is not a statutory provision but is a rule of the Common Law and the Judges in well-known cases have evolved a rule that the necessity for the corporate seal to be fixed to contracts does not apply to such contracts as appertain to the ordinary execution by the Corporation of its daily duties; and that has been engrafted by the Judges on to the rigour of the Common Law. I am quite satisfied it is quite impossible for a Judge in India to temper the ferocity of the Statute Law by similar engraftments upon it. I must, therefore, hold that in the absence of a contract which fulfils the re quire men to the Act, the plaintiff's suit cannot succeed.

5. I am going to take a step, which I am taking with some doubt, but which I think I am amply warranted in taking in the facts of this case. Although I decide in favour of the Municipality and dismiss the suit, I am not going to give them their costs. They had ample warning on the correspondence that the Engineering Company was despatching the boilers and giving them possession of them on the faith of the arrangement made or which they suggested was made with Mr. O'Brian as being one that was going to be loyally and honourably carried out by the Council. I am quite satisfied that if the Council has told them that they would not accede to the enhanced costs, the Engineering Company would have left them to have their remedy in damages for non-delivery in July or August and would not have despatched the boilers. The Council took the boilers knowing perfectly well that the plaintiff company relied upon the enhanced terms. They never wrote any letter pointing out that the Council did not agree to these terms and that it must not be supposed that they had agreed to them. And though I do not think I can say that, that being a pure point of law, it was necessary for the Council to plead it although they pleaded evidence and all kinds of things that they need not plead nevertheless I think as far as the correspondence goes, it is common honesty for the Council to repudiate the contract on this ground if they wanted; and as Mr. Mockett says, if they had done so, nothing would have been easier for the Engineering Company to save all the expense of taking proofs of witnesses, preparing expert evidence and that by not then taking a preliminary point at the first hearing which would have saved all the expense that has been thrown away. In these circumstances, I think, I am invested with discretion which I think I may exercise judicially by depriving the successful defendant of the costs of this suit.


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