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R.A. Dickie and Co. (Agencies) Ltd. Vs. the Municipal Board, Benares and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil;Limitation
CourtKolkata High Court
Decided On
Case NumberCivil Revn. Case No. 1424 of 1954
Judge
Reported inAIR1956Cal216
ActsLimitation Act, 1908 - Section 11 - Schedule - Article 52; ;Uttar Pradesh Municipalities Act, 1916 - Section 326(3); ;Constitution of India - Articles 245 and 254; ;Government of India Act, 1915 - Sections 79, 79(2) and 80A; ;Government of India (Amendment) Act, 1919; ;Government of India (Amendment) Act, 1935
AppellantR.A. Dickie and Co. (Agencies) Ltd.
RespondentThe Municipal Board, Benares and anr.
Appellant AdvocateManindra Nath Ghose and ;Anil Chandra Sen, Advs.
Respondent AdvocateR. Bakshi and ;Haripada Saha, Adv.
Cases ReferredJogendra Narayan v. Debendra Narayan
Excerpt:
- .....(1) and (2; of section 79 of the government of india act, 1915, are as follows:'(1) the local legislature of any province has power, subject to the provisions of this act, to make laws for the peace and good government of the territories for the time being constituting that province.(2) the local legislature of any province may with the previous sanction of the governor-general, but not otherwise, repeal or alter as to that province any law made either before or after the commencement of this act by any authority in british india other than that local legislature'8. sub-sections (3) and (4) of section 79 of the government of india act, 1915, contain certain further restrictions upon the powers of the local legislature. by section 10 of the government of india act, 1919,.....
Judgment:

Bachawat, J.

1. This revisional petition arises out of a suit instituted by the petitioner against the Municipal Board, Benares and its Administrator in the Court of Small Causes Calcutta, for the recovery of the price of goods said to be sold and delivered by the petitioner to the Municipal Board, Benares.

2. Four items of goods were despatched and sent by train from Calcutta to Benares by the petitioner to the Municipal Board. The petitioner submitted its bill for Rs. 1918/- dated 19-8-1949. By a letter dated 13-9-1949, the Municipal Board, Benares, rejected two items of goods on the ground of late supply and inferiority of quality.

There was subsequent correspondence but the Municipal Board persisted in its contention that the goods were duly rejected. The petitioner served a formal notice dated 16-8-1950 on the Municipal Board. The petitioner instituted the present suit claiming a sum of Rs. 1660/- being the balance of the price of goods after giving credit for the sum of Rs. 258/- paid by the Municipal Board on or about 10-4-1950.

The learned Judge of the Court of Small Causes by his judgment dated 12-5-1952 dismissed the suit on the ground that it was barred by the special law of limitation embodied in Section 326(3) of the United Provinces Municipalities Act, 1916, (Act II of 1916). The judgment was affirmed by a Full Bench of the Court of Small Causes on 3-2-1954.

3. On the assumption that the special law of limitation does not apply to this case, it is clear that the suit is not barred by the law of limitation. Article 52 of the Indian Limitation Act will then apply to the case. The suit is not barred because it was instituted within three years from the date of delivery of the goods. The Municipal Board relies upon the provisions of Section 326(3) of the United Provinces Municipalities Act, 1916. Sub-sections (1) and (3) of Section 326 are as follows:

'(1) No suit shall be instituted against a board, or against a member, officer or servant of a board in respect of an act done or purporting to have been done in its or his official capacity, until the expiration of two months next after notice in writing has been, in the case of a board, left at its office, and in the case of a member, officer or servant, delivered to him or left at his office or place of abode, explicitly stating the cause of action, the nature of the relief sought, the amount of compensation claimed, and the name and place of abode of the intending plaintiff and the plaint shall contain a statement that such notice has been so delivered or left. x x x x

'(3) No action such as is described in Sub-section (1) shall, unless it is an action for the recovery of immovable property or for a declaration of title thereto, be commenced otherwise than within six months next after the accrual of the cause of action x x x x'.

4. Both the learned Judge, Fourth Bench & the Full Bench of the Court of Small Causes held that the cause of action accrued more than six months before the date of the institution of the suit. In my opinion, this conclusion is correct. The property in the goods passed to the Municipal Board, Benares, not later than 13-9-1949.

The price became immediately payable in the absence of any agreement to the contrary. Under Section 55 of the Indian Sale of Goods Act, the plaintiff was entitled to sue for the price of the goods at least on 13-9-1949. On the assumption that the special law of limitation applies, the suit was barred by limitation.

5. The vital question in this case, therefore, is whether the provisions of Section 326(3) of the United Provinces Municipalities Act, 1916, (Act II of 1916) govern this suit.

6. This Act was passed by the United Provinces Legislature under the powers conferred by the Government of India Act, 1915.

7. Sub-sections (1) and (2; of Section 79 of the Government of India Act, 1915, are as follows:

'(1) The local Legislature of any Province has power, subject to the provisions of this Act, to make laws for the peace and good government of the territories for the time being constituting that Province.

(2) The local Legislature of any Province may with the previous sanction of the Governor-General, but not otherwise, repeal or alter as to that Province any law made either before or after the commencement of this Act by any authority in British India other than that local Legislature'

8. Sub-sections (3) and (4) of Section 79 of the Government of India Act, 1915, contain certain further restrictions upon the powers of the local Legislature. By Section 10 of the Government of India Act, 1919, Section 80A was substituted for Section 79 of the Government of India Act, 1915. Sub-sections (1) and (2) of the new Section 80A correspond to Sub-sections (1) and (2) of the previous Section 79.

9. Section 99 of the Government of India Act, 1935 and Article 245 of the Constitution impose territorial restrictions on the powers of the local and State Legislatures somewhat similar to those contained in Section 79(1) of the Government of India Act, 1915.

10. The applicability of the United Provinces Municipalities Act, 1916, (Act II of 1916), to this suit must be judged with reference to Section 79 of the Government of India Act, 1915.

11. This identical Act came up for consideration by a Full Bench of the Allahabad High Court in-- 'Abdul Rahman v. Abdul Rahman : AIR1925All380 , where that Court held that in view of the assent of the Governor General in-Council, the local Legislature could by this Act creates special tribunals with exclusive jurisdiction to try disputes regarding election to the Municipal Board. The question in this case is, however, different.

12. Under Section 79 of the Government of India Act, 1915, the local Legislature could make laws for the territories of its own Province. Where the field of legislation was occupied by any law made by any authority other than the local Legislature, it could legislate with regard to the occupied field only with the consent of the Governor-General-in-Council. Even with such asserit, if could not, however, repeal or alter such law as to other Provinces.

Thus, the Indian Limitation Act was an Act made by an authority in British India other than the local Legislature and the local Legislature could not even with the assent of the Governor-General repeal or alter that law as to other Provinces.

13. The local Legislature could not also make any law with regard to the matters specified in Sub-section (3) of Section 79 without the assent of the Governor-General. Even with such assent, it could not legislate for territories outside that province. It has been so held with regard to Section 80 of the Government of India Act introduced by the Government of India Act, 1919: See -- 'Commr. of Wakfs, Bengal v. Narasingh Chandra Daw & Co. : AIR1939Cal648 and -- 'Wahiduddin v. Makhanlal' : AIR1938All564 .

14. The power of the local Legislature to legislate with regard to the Province was very wide. With regard to the Province, the Legislature could make any connection with the Province the occasion or subject of a legislation. Its laws made for its own Province could not be challenged so long as the connection with the province was a real one and the law was relevant to that connection. Thus, the local Legislature could pass laws affecting land within the Province although the owner of the land was resident or domiciled outside the Province.

15. The legislative power, though very wide, was conditioned by territorial limits and was restricted to the Province.

16. Under the successive Acts of Parliament, the local Legislature could legislate only for the Province. This territorial limitation was fundamental. The decisions under Section 80A of the Government of India Act, 1815 and Section 235 of the Government of India Act, 1935, illustrate this point. Thus, under the Government of India Act, 1935 , a provincial Legislature could not legislate with regard to lands and buildings situated in some other Province although they were vested in His Majesty for the purposes of that Province, and the rights of the Provincial Government over such lands and buildings were analogous to those of a private owner. In 'In the matter of Reference under Section 213, Govt. of India Act, 1935, . Sir Maurice Gwyer C. J. observed that a Provincial Legislature by virtue of Section 99(1) of the Government of India Act has 'power to make laws for the Province only or for any part thereof, that is, its Legislative power is strictly confined to the territory in the Province.'

17. The United Provinces Legislature, whose powers were conditioned by Section 80A of the Government of India Act, 1915, could not, by the United provinces Agriculturists' Relief Act, 1934, affect rights in land outside the Province and therefore the provisions of that Act could not affect substantive rights in respect of a single mortgage of properties both within and outside the Province. (See : AIR1938All564 ).

18. The local Legislature also could not pass laws restricting the jurisdiction of Courts of another Province. By the United Provinces Agriculturists' Relief Act, 1934, the United Provinces Legislature, whose powers were limited and conditioned by Section 80A of the . Government of India, 1915, could not limit the jurisdiction of a Court in another Province to entertain and try a suit. Where a part of the cause of action against an agriculturist arose within the jurisdiction of a Court in Bihar, that Court continued to have jurisdiction to try that suit under Section 20(c), Civil P. C., and that jurisdiction could not be taken away by Section 7 of the local Act which provided that a suit against an agriculturist must be brought in certain courts within whose territorial limits the agriculturist resided or carried on business or where his holding was situated. See -- 'Briju Pandy v. Gangu Ahir' AIR 1939 Pat 294 (E).

19. The local Legislature could not also pass laws regulating the powers and procedure of courts of another Province. Thus, the united Provinces Legislature could not by the United Provinces Court of Wards Act, (Act IV of 1912), legislate that in a suit pending in another Province that Court must observe the special procedure with regard to the representation of a ward under the Court of Wards Act of the United Provinces. See -- Chattoo Lal Misser & Co. v. Naraindas Baijnath Prasad' : AIR1930Cal53 .

The Bengal Legislature, whose powers were conditioned by Section 80A of the Government of India Act, 1915, could not, by the Bengal Wakf Act, (Act XIII of 1934), impose an obligation on a Court in Assam to issue notice to the Commissioner of Wakfs, Bengal, in proceedings for sale of wakf property in Assam in execution of a decree obtained in Assam, though part of the wakf property was situated in Bengal. See ' : AIR1939Cal648 .

20. These rulings are manifestly right although I must not be taken to assent to all the reasons given in these decisions. In some other cases, there are observation to the effect that the laws of local Legislature can have no extra-territorial operation and cannot affect persons and properties outside the Province. I think such observations were somewhat broadly made. The Courts of this country very often have to recognise the extra-territorial consequences of a foreign law.

The rights acquired under the laws of a foreign country very often may and must be recognised in this country. Thus, by Section 11 of the Contract Act, the capacity of a person to make a contract must be determined by the law to which he is subject. Again, broadly speaking, questions affecting the status of a person are determined by the law of his domicil. The lex fori must also recognise a corporation incorporated under the laws of another Province Just as it recognises a natural person born in another Province.

In -- 'Lazard Bros. & Co. v. Midland Bank Ltd.' (1933) AC 289 at p. 297 (G), Lord Wright observed thus :

'English Courts have long since recognised as juristic persons, corporations established by foreign law in virtue of the fact of their creation and continuance under and by that law ........ But if the creation depends on the act of the foreign State which created them, the annulment of the act of creation by the same power will involve the dissolution and non-existence of the corporation in the eye of English law. The will of the sovereign power which created it can also destroy it'.

21. The law of the country of origin determines the power and functions of the corporation and the lex fori must look to that law for the determination of such questions.

22. A special law of procedure and a special law of limitation applicable to the corporation by the laws of the country of its origin cannot, however be said to be part of the attributes or the juristic personality of the corporation. The corporation does not carry with it the special law of limitation and the special law of procedure when it sues or is sued in another country, just as a natural person does not carry the laws of limitation and the laws of procedure of his country of origin when he goes to another country.

The laws of limitation and the laws of procedure are not personal laws. They do not move with and follow the person. A foreigner cannot, by virtue of the laws of his own country, enjoy in this country greater advantages than other litigants nor can he be deprived of the advantages which the lex fori confers upon other suitors with regard to matters of procedure and limitation.

23. It is well settled that so much of the law as affects the remedy and the procedure only is governed by the law of the Country in which the action is brought and not by foreign law. The Court will not apply a foreign law of limitation which affects the remedy only and is therefore a matter of mere procedure. The foreign law of limitation will be applied where it extinguishes the right or creates the title so that it ceases to be a matter of mere procedure.

Section 11, Limitation Act is a plain recognition of this principle. Though the proper law of contract determines most matters relating to the formation, validity and substance of the contract by virtue of Section 11 of the Indian Limitation Act, no foreign law of limitation is a defence to a suit in India unless that law has extinguished the contract and the parties were domiciled in such country during the Prescribed period.

Section 11 of the Indian Limitation Act is, however, not exhaustive. Thus it was held in -- 'Nabibhati Vazirbhai v. Dayabliai Amulakh' AIR 1916 Bom 200 (H) a decree passed by the Native State of Baroda could not be executed in India because the application for execution was barred by the Indian law of Limitation although it was clearly not barred by the law of Limitation of Baroda State.

24. For many purposes, the special laws prevailing in several sub-divisions of a single political state of which the forum is a part is as much foreign law as the laws of a state under a foreign political sovereignty. Thus, Beaumont C. J. in -- 'Shankar Vishnu v. Maneklal Haridas' AIR 1940 Bom 362 (I), observed:

'No doubt, the province of Bombay and the Central Provinces are both part of British India, but, in my opinion, where the law of one Province of British India is distinct from the law of another Province, the two Provinces must be regarded for the purposes of this rule as foreign countries 'inter se'.'

Somewhat similar observations will be found in the case of : AIR1930Cal53 .

25. By virtue of Section 6 of the United Provinces Municipalities Act, 1916, the Municipal Board, Benares, is a body corporate. It has a perpetual succession, a common seal and subject to restrictions and qualifications imposed by the laws in force, is vested with the capacity of suing and of being sued in its corporate name, of acquiring, holding and transferring property, movable or immovable and of entering into contracts.

The Municipal Board of Benares is a juristic person created by the local laws of the United Provinces. Its personality, though created by the local laws of a Province, must be recognised in other Provinces. Sub-section (3) of Section 326 of the United Provinces Municipalities Act, 1916, is a special law of limitation. It is not an attribute of its corporate existence and is not, a restriction or qualification of its corporate capacity.

It does not extinguish the right but only bars the remedy. Even remedy by way of an application, if such application lies, is not barred. The special law of limitation does not govern the procedure of Courts of other Provinces and does not apply to suits instituted in other Provinces.

26. Sub-section (3) of Section 326 enacts a special law of limitation and therefore pro tanto alters and repeals the existing Indian law of Limitation. Having regard to the assent of the Governor-General-in-Council, the alteration or repeal is of course valid and operative within the United Provinces as laid down in Section 79(2) of the Government of India Act, 1915.

The assent of the Governor-General, However, does not enable the United Provinces Legislature to alter and repeal the Indian law of Limitation with regard to other Provinces. Sub-section 3 of Section 326 does not, therefore, apply to a suit Instituted in Court outside the United Provinces.

27. I think the same result ought to follow on a textual construction of the Act. The whole Act passed by the local Legislature must be looked at in order to ascertain if general words used in the Act are conditioned by territorial limitations. See -- 'Jogendra Narayan v. Debendra Narayan' AIR 1942 PC 44 (J).

The preamble to the United Provinces Municipalities Act, 1916, (Act II of 1916) describes the Act as 'An Act to consolidate and amend the Law relating to Municipalities in the United Provinces.' Section 1(2) of the Act provides: 'It extends to the territories * * * administered by the Lieutenant-Governor of the United Provinces.' Even apart from this section, the Act of course could not extend to territories outside the Province.

Yet, I think, the section is relevant & important so show the real intention of the Legislature. See in this connection : AIR1939Cal648 ; : AIR1930Cal53 and AIR 1939 Pat 294 (E). Thus, the very wide words 'local area' and 'municipality' in Section 3 of the Act must be read as meaning local area and municipality within the United Provinces. Similarly, the word ' action' In Section 328 (3) of the Act ought to be construed as meaning action brought within the United Provinces.

28. In in the matter of Hindu Women's Rights to Property Act, 1937', Gwyer C. J. Observed:

'If that word necessarily and inevitably comprises all forms of property, including agricultural land, then clearly the Act went beyond the powers of the Legislature taut when a Legislature with limited and restricted powers makes use of a word of such wide and general import, the Presumption must surely be that it is using it with reference to that kind of property with respect to which it is competent to legislate and to no other.'

29. Similarly, in this case, the presumption must be that the Legislature uses the word 'action' with reference to that kind of action with regard to which it is competent to legislate and no other, namely, an action brought in a court within the United Provinces.

30. The Municipal Board of Benares has a local habitat in the sense that it is incorporated in the United Provinces and it functions in Benares within the united Provinces. Usually, Proceedings are instituted against the Municipal Board within the area of its local habitat and then no difficulty arises with regard to the enforcement of the special law of limitation. There is no law, however, that the Municipal Board cannot be sued outside the United Provinces where the cause of action arose outside that Province.

If the Municipal Board chooses to enter into a contract and the cause of action in respect of such contract arises outside the United Provinces, the Municipal Board must take the consequences of being sued in the courts of another Province. Even then, I venture to think, the Municipal Board can protect itself by a special clause in the contract providing that all suits relating to the contract must be brought in the courts of the United Provinces and in no other. In this case, of course, there is no such special contract.

31. In our opinion, the United Provinces. Municipalities Act, 1916, (Act II of 1916), does not apply to the suit. The suit is not barred by the law of Limitation. The judgments of the Courts below are erroneous and must be set aside.

32. We pass the following order:

We make tile Rule absolute, set aside the Judgments and orders of the learned Judge, 4th Bench and of the Full Bench of the Court of Small Causes, Calcutta, and adjudge and declare that the suit is not barred by limitation and/or by the provisions of Section 326(3) of the United Provinces Municipalities Act, 1916 (Act II of 1916). We remit the suit to the learned Judge of the Court of Small Causes for trial and disposal according to law. The costs here and in the courts below will abide the result of the suit.

Guha Ray J.

33. I agree.


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