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Bengal Coal Co. Ltd. Vs. the Union of India (Uoi) - Court Judgment

LegalCrystal Citation
SubjectContract;Limitation
CourtKolkata High Court
Decided On
Case NumberA.F.O.D. No. 304 of 1962
Judge
Reported inAIR1971Cal219
ActsContract Act, 1872 - Sections 70 and 196; ;Limitation Act, 1963 - Schedule - Article 14; ;Constitution of India - Article 299(1); ;Interest Act, 1839 - Section 1
AppellantBengal Coal Co. Ltd.
RespondentThe Union of India (Uoi)
Appellant AdvocateJoy Gopal Ghose, Adv.
Respondent AdvocateS.C. Das Gupta and ;Noni Gopal Das, Advs.
DispositionAppeal allowed in part
Cases ReferredChatturbhuj Vithaldas Jasani v. Moreshwar Parashram. It
Excerpt:
- .....but he held that there was no ratification of the agreement and further that section 70 of the indian contract act was not applicable and though he found that interest should be paid, he ultimately dismissed the suit. hence this appeal. 2. the first point that is pressed by mr. joy gopal ghose learned advocate for the appellant, is to the effect that the learned judge erred in holding that there has not been any ratification. mr. s.c. das gupta, the learned government pleader appearing on behalf of the respondent has drawn our attention to a decision of the supreme court in mulam chand v. state of madhya pradesh, : [1968]3scr214 to show that the question of ratification cannot be considered in such cases of void contract. mr. ghose, on the other hand has relied on the decision in :.....
Judgment:

S.K. Chakravarti, J.

1. This is an appeal at the instance of the plaintiff. The suit was instituted by the plaintiff against the defendant Union of India claiming a sum of Rs. 10,901-8-0 alleged to be due for supply of coal together with a sum of Rs. 6540-14-0 by way of interest. The Union of India contested the claim denying the supply and its main points were that there was no valid contract between it and the plaintiff in view of the provision of Section 175 of the Government of India Act, 1935 corresponding to Article 299 of the Constitution and that the claim is barred by limitation and there was no notice under Section 80 of the Code of Civil Procedure. The learned Subordinate Judge who tried the suit at its original stage was satisfied that the goods had been delivered and the price claimed^ would be due but he found that no valid notice under Section 80 of the Code of Civil Procedure had been served and further that the claim was barred by limitation and the contract would not bind the Union of India in view of Section 175 of the Government of India Act. The plaintiff appealed to this Court and this Court affirmed the finding of the learned Subordinate Judge to the effect that the supply had been actually made. This Court also found that notice under Section 80 of the Code was duly served. This Court also found that there was no valid contract as found by the learned Subordinate Judge. But this Court was of opinion that the learned Subordinate Judge did not consider the question of ratification and held that in view of the decision of the Supreme Court in : [1954]1SCR817 the question of ratification may arise. It, therefore, remanded the suit for a fresh trial on this point and also directed the learned Subordinate Judge to consider the question of limitation again in view of the fact that the plaintiff's case was that no payment could be demanded or could be made until bills presented by the plaintiff had been checked and verified by the defendant. This time the learned Subordinate Judge held that the suit was not barred by limitation but he held that there was no ratification of the agreement and further that Section 70 of the Indian Contract Act was not applicable and though he found that interest should be paid, he ultimately dismissed the suit. Hence this appeal.

2. The first point that is pressed by Mr. Joy Gopal Ghose learned Advocate for the appellant, is to the effect that the learned Judge erred in holding that there has not been any ratification. Mr. S.C. Das Gupta, the learned Government Pleader appearing on behalf of the respondent has drawn our attention to a decision of the Supreme Court in Mulam Chand v. State of Madhya Pradesh, : [1968]3SCR214 to show that the question of ratification cannot be considered in such cases of void contract. Mr. Ghose, on the other hand has relied on the decision in : [1954]1SCR817 , Chatturbhuj Vithaldas Jasani v. Moreshwar Parashram. It appears that this decision was not placed before their Lordships in Mulam Chand's case. However, we are bound by the latest decision and must accept the contention of Mr. Das Gupta that the question of ratification would not arise in such a proceeding of void contract. However, we must also point out that the learned Judge misdirected himself when he found that there was no ratification in the instant case. He found that the goods had actually been delivered to the Union of India. That was a finding arrived at by both the trial courts and was also affirmed by this Court. It also appears that successive Garrison Engineers had acted on the basis that the supply had been duly made to the Union of India. It cannot be stated that the Successive Garrison Engineers were in collusion with the first one (sic) and their acts and conduct would undoubtedly show that there was ratification by the Union of India. They are accredited and authorised Agents of the Union of India.

3. Mr. Ghose next contends that the learned Judge was in the wrong in holding that Section 70 of the Contract Act does not apply. In Mulam Chand's case the Supreme Court observed that even in the case of a void contract under Section 175(3) of the Government of India Act or the corresponding provision of Article 299(1) of the Constitution, the provision of Section 70 can be invoked by the aggrieved party to the void contract. The first condition to be satisfied under the section is that a person should lawfully do something for another person or deliver something to him; the second condition is that in doing the said thing or delivering the said thing he must not intend to act gratuitously, and the third condition is that the other person for whom something is done or to whom something is delivered must enjoy the benefit thereof. If these conditions are satisfied Section 70 imposes upon the latter person the liability to make compensation to the former in respect of or to restore the thing so done or delivered. The learned Subordinate Judge was wrong in thinking that the delivery also must be made lawfully. In our view the term lawfully qualifies only the term following it, viz., 'does' and not the word 'delivers'. That would also be clear from the illustration (a) to Section 70. Now even here, if the contract was void, so far as the Union of India is concerned, the evidence would show clearly, which was also accepted by both the trial Judges, that the supply was made to the Union of India and was also used by the Union of India. That would also appear from the fact that Successive Garrison Engineers had acted on that basis. The first condition therefore, is fulfilled. There is no question that the plaintiff intended to make the supply gratuitously. The last condition is also fulfilled as the Union of India has enjoyed the benefits of the supply. In our view, therefore, the Union of India would be liable to compensate the plaintiff for the price of the goods sold or in other words, for the sum of Rs. 10,901-8-0.

4. Mr. Das Gupta has contended that the learned Judge was not right in holding that the suit was not barred by limitation. It would appear from the evidence that no payment could be demanded and no payment was to be made until the bills presented by the plaintiff had been checked and verified by the defendant. Ext. E (f) is a letter from an officer of the Union of India to another officer dated 20th October, 1953. It shows quite clearly that the plaintiff was agreeable to accept the sum of Rs. 10,901-8-0 and the bills were forwarded for verification and allocation and early return by one officer to another. Therefore, there was admittedly a liability on the 20th October 1953. The bills had not even then been properly and finally checked and the suit having been instituted on the 19th of May, 1954 would be within time in any view of the matter.

5. The learned trial Judge had held that the plaintiff would get interest at the rate of 6 per cent per annum provided his claim was otherwise maintainable. Mr. Das Gupta has contended that the plaintiff is definitely not entitled to get the interest from 1944 at least up to the 20th of October, 1953 when, according to the plaintiff, the cause of action arose. Mr. Das Gupta argues that the plaintiff tries to save limitation by alleging that uptill that date the bills had not been finally checked and therefore, the plaintiff cannot get advantage of this fact and claim interest as well. This is a very sound proposition and we accept it. The plaintiff cannot have it both ways. At the same time, on the 20th of October, 1953 when the plaintiff expressed Its willingness to accept the sum of Rs. 10,901-8-0, the plaintiff would be entitled to get interest uptill the date of full and final realisation. We do not understand why the amounts had not been paid so long. But in view of the state of the law we direct that the plaintiff would get interest only at the rate of 4 per cent from the 20th October, 1953, up to the date of full and final realisation. The amount in claim should be paid within six months from date.

6. The appeal Is accordingly allowed in part and the judgment passed by the learned Subordinate Judge is set aside and the suit is decreed in part for the sum of Rs. 10,901-8-0 with corresponding costs thereon and this sum will carry interest as we have already pointed out, at the rate of 4 per cent per annum from the 20th of October. 1953 upto the date of full and final realisation. There will be no order as to costs in this appeal.

7. We must place on record our appreciation as to the way in which the learned Government Pleader has placed the law and facts before us and he has been very very fair.

S.K. Datta, J.

8. I agree.


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