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The Khadi and Village Industries Commission and ors. Vs. Sudhangsu Sekhar Banerjee - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKolkata High Court
Decided On
Case NumberF.A. No. 313 of 1967
Judge
Reported inAIR1973Cal534
ActsKhadi and Village Industries Commission Rules, 1957 - Rule 26(2) and 26(3); ;Code of Civil Procedure (CPC) - Section 100; ;Contract Act - Section 70
AppellantThe Khadi and Village Industries Commission and ors.
RespondentSudhangsu Sekhar Banerjee
Appellant AdvocateGanendra Narayan Roy, Adv.
Respondent AdvocateS.C. Mitter and ;S.P. Roy Chowdhury. Advs.
DispositionAppeal allowed
Cases ReferredState of West Bengal v. B.K. Mondal
Excerpt:
- .....in a number of cases that there has been conflicting decisions on the question as to whether a suit filed against an agent of a railway was merely a case of misdescription. even in 65 ind app 182 = (air 1938 pc 165), (gaekwad of baroda v. habib-ul-haque) referred to in the above decision of this court, the suit though sled against the railways was held to be filed against the gaekwad of baroda. such being the position it is difficult to see how without being satisfied as to the test indicated in the above decision, the appellate court below could have allowed amendment in a casual manner. on the view that suit filed describing khadi and village industries commission as chairman was a matter of mere formality, and the end could be achieved by striking off the word 'chairman'. in our.....
Judgment:

A.K. Sinha, J.

1. This second appeal is preferred against an appellate decree reversing the decree of trial Court.

2. The plaintiff respondent filed a suit for recovery of a sum of Rs. 6,765/12/4 Pies on 2nd January, 1963, in the Additional Court of Subordinate Judge, Nandia, alleging inter alia, that he carried on repair works of certain building including additions and alterations under a contract between him and the defendants at a cost of Rs. 27,665/12/4 Pies out of which he received a sum of Rs. 20,900/- but in spite of demands the balance was not paid.

3. The defendant No. 1, chairman of Khadi and Village Industries Commission, the present appellant, contested the suit and in his written statement he denied all material allegations. In particular, be denied such contract and also his liability to pay the amount of claim as being excessive, illegal and unenforceable. The defendant Nos. 2 and 3 that is respondent Nos. 2 and 3 in the present appeal did not contest the suit.

4. The trial Court, on the question of maintainability of the suit in its present form, found nothing wrong i.e. the suit being filed not against Khadi and Village Industries Commission which is a corporate body under the Statute but against its chairman and on the question of liability of the appellant it found that the contract as pleaded was not established and in any case the respondent Nos. 2 and 3 who were the employees did not act within the scope of their authority and therefore contract even if entered into by them with the plaintiff for the contract of repairs or additions or alterations was not binding on the appellant. Accordingly, it dismissed the suit against the appellant but passed a decree ex parte against the respondent Nos. 2 and 3.

5. On appeal by the plaintiff respondent No. 1 the appellate Court reversed the finding of the trial Court on the question of liability of the appellant on the view that the respondent Nos. 2 and 3 had the implied authority to bind the principal and after allowing the amendment striking out the name of the Chairman held that the suit was maintainable and thus decreed the suit against the present appellant and thus allowed the appeal.

6. In the appeal before us two questions have arisen--first is whether the appellant is liable for the amount claimed on the basis of the contract pleaded, secondly whether such a suit framed against the Chairman of Khadi and Village Industries Commission is maintainable. We shall take up the second question first. It appears that the appellate Court appreciated that a suit could only be filed against Khadi and Village Industries Commission as being a corporate body created by the Statute but took the view that it was a mere formality and the irregularity could be cured by deleting the name of the Chairman. Question therefore substantially is whether this was only a case of misdescription. If it is not so, then it is undisputed, such an amendment could not be allowed as the claim against Khadi and Village Industries Commission was barred by limitation. Mr. Mitter has strongly relied on a Bench decision of this Court in Municipal Commrs. of Dacca v. Gangamani, 44 Cal WN 277 = (AIR 1940 Cal 153) to show that even if the suit has been filed against the Chairman of a particular corporate body or Corporation under a Statute, it must be treated not as a substantial defect but only a case of misdescription. In this case what happened was that a suit was filed by the plaintiff challenging certain municipal assessments as ultra vires against the Chairman of the Commissioners of Dacca Municipality. It was, however, discovered that prior to the commencement of the new Municipal Act, Section 29 under the earlier Act provided that the Commissioners shall (in the name of the chairman) by the description of the chairman of the Municipal Commissioners shall be a body corporate and in such name shall sue or be sued. When the suit was filed almost immediately after the commencement of the new Act obviouslythrough ignorance about the description of the body of the Commissioners as a body corporate under the new Act, a suit was filed against the Chairman of Commissioners describing them as constituted under the expired Act. It was found on scrutiny of the averments made in the plaint that the suit was filed claiming all reliefs against the Municipal Commissioners and not against the Chairman. In that context, on a review of long line of cases, it was held inter alia that:

'Therefore that the name is not always the true criterion for determining the party really sued we have to consider the nature of the allegations in the plaint and the nature of the relief sought. There can be no doubt that in the case before us the suit was from its very inception a suit against the Municipal Corporation. Therefore the effect of the amendment was not to substitute or add a new party or to convert the suit into a new suit. In these circumstances, it must be held that the amendment related back to the date of the suit as originally filed. On this view, it was within six months limit and not time barred.'

7. From the above observations it seems clear from the averments in the plaint it has got to be found out whether a suit in essence or the reliefs sought for were made against the Corporation or corporate body itself. It is neither possible nor desirable to lay down any hard and fast rule to cover the cases of misdescription of a party in the plaint. For, it would be found in a number of cases that there has been conflicting decisions on the question as to whether a suit filed against an agent of a Railway was merely a case of misdescription. Even in 65 Ind App 182 = (AIR 1938 PC 165), (Gaekwad of Baroda v. Habib-ul-Haque) referred to in the above decision of this Court, the suit though Sled against the Railways was held to be filed against the Gaekwad of Baroda. Such being the position it is difficult to see how without being satisfied as to the test indicated in the above decision, the appellate Court below could have allowed amendment in a casual manner. On the view that suit filed describing Khadi and Village Industries Commission as Chairman was a matter of mere formality, and the end could be achieved by striking off the word 'chairman'. In our opinion, this was wholly an erroneous approach to the question. We would therefore proceed to see whether there are proper pleadings in the plaint to enable us to find out whether the suit in essence or the reliefs sought for were made against the Khadi and Village Industries Commission. On a scrutiny of the plaint it appears to us that there is not only proper averments in the plaint but there is nothing in the plaint to show that the contract was entered into between the Khadi and Village Industries Commission and the plaintiff-respondent or that the respondent Nos. 2 and 3 were authorisedemployees of the Commission. Equally, there is nothing to indicate in the plaint that the relief was sought for against the Commission. On a fair reading of the plaint it seems clear that the suit was filed against the chairman and not against the Khadi and Village Industries Commission, with the result that the amendment has the effect of allowing the claim against the Commission which is long barred by limitation. This is wholly untenable in law.

8. Mr. Mitter has, however, also relied on another decision in : AIR1953Cal381 , (National Industries v. Sassoon Rice Mills). But here from the facts it appears that only the word 'Limited' was sought to be deleted which was affixed to the name of the defendant company and in that context it was held that this was a case of mere mis-description. In our opinion, therefore the suit was wrongly instituted against the Chairman, Khadi and Village Industries Commission and therefore it is not maintainable in law.

9. In the view we have taken on the second question, it is not necessary to go into the first question, namely as to whether the contract as pleaded was binding. But since the question was considerably discussed by both the Courts below we proceed to examine whether the contract set up by the plaintiff respondent was binding on the Commission. It appears that both the Courts below overlooked mandatory provisions of Sub-rule (3) of Rule 26 of Khadi and Village Industries Commission Rules 1957, wherein it is provided that 'contracts made on behalf of the Commission shall not be binding on the Commission unless they are executed by a person authorised under Sub-rule (2) to enter into them and the seal of the Commission is affixed thereto.' The impugned contract in the present case was clearly entered into at a date after the Rules came into operation in 1957 and that also orally and not in writing in compliance with the above Rules. It is therefore quite clear that any contract entered into in any manner other than in accordance with the provisions of the above Rule shall not be binding on the Commission, for it is well established that any contract entered into by a statutory body not according to the provisions laid down in the Act or in the Statutory Rules shall be void and unenforceable (see Bhikraj Jaipuria v Union of India, : [1962]2SCR880 ) Mr. Mitter, however, has relied on Section 70 of the Indian Contract Act and support in aid of his contention sought to be drawn from a Supreme Court decision in State of West Bengal v. B.K. Mondal, : AIR1962SC779 , on the ground that the Commission has taken full benefits under the contract even though not binding and therefore the plain* tiff was entitled to get compensation. But this is again a mixed question of fact and law. There is nothing in evidence on record to show that the Commission has takenbenefit of the repairs or additions or alterations said to be executed by the plaintiff in respect of the disputed building. So, we arc unable to go into this question for the first time at this stage in this appeal.

10. On the other question namely as to the scope of authority of the respondent Nos. 2 and 3 who are the employees the appellate Court below was in error in taking the view that they had implied authority. The Commission is a statutory body and has power to enter into a contract only in accordance with the provisions of Sub-rule (2) of Rule 26 of the Khadi and Village Industries Commission Rules, 1957, which provide that the Commission may delegate to the Chairman, the Secretary, any member of the Commission or any officer of the Commission, such powers of entering into contracts on it behalf as it may think fit. That being the position under the law question of implied authority does not arise at all. The plaintiff has to prove by cogent and clear evidence that the Commission delegated the power to enter into the impugned contract on its behalf in favour of the respondent Nos. 2 and 3. There is no evidence on record to show that it did so delegate. Mere payment of money to the plaintiff on account of the bill from time to time by the same set of employees at the locale can neither operate as an authority nor could imply that such delegation of entering into a contract was given to them by the Commission. In our view, the decision of the appellate Court is incorrect.

11. Accordingly, this appeal is allowed. We set aside judgment and decree of the appellate Court below and restore the decree that of the trial Court. But there will be no order as to costs in this appeal.

A. N. Banerjee. J.

12. I agree.


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