UNION OF INDIA Vs. J K GAS PLANT

JUDGEMENT

(1.) This appeal by certificate granted under Article 133 (1) (a) of the Constitution of India by the Allahabad High Court is directed against its judgment dated the 28th of January, 1966, confirming on appeal a decree passed by the Civil Judge, Kanpur, for the recovery of Rs. 46,652-14-6 with interest at the rate of 3 per cent annum from the date of the institution of the suit till payment in favour of M/s. J. K. Gas Plant Manufacturing Company Limited against the sole defendant, namely, the Union of India.

(2.) The case of the plaintiff company may be briefly stated thus. The Government of India had supplied some steel to the plaintiff company for manufacturing gas plants at Rampur. Only a part of the steel so supplied was utilized for the intended purpose and with regard to the rest the Regional Deputy Iron and Steel Controller, U. P. Circle, Kanpur (hereinafter referred to as the Kanpur Controller) directed the plaintiff company through a letter dated the 8th/10th of November, 1944 (exhibit 16) to deliver the same to the U. P. Registered Stock Holders Association, Kanpur (for short the Association). In relation to the recovery of price of the material the letter stated:

(3.) In its written statement the Union of India admitted the correctness of the order contained in letter exhibit 16. It pleaded however that, that order was cancelled in toto and not merely in regard to the party to whom the plaintiff company had to make over the surplus steel. It was specifically denied that the disputed goods had been delivered to G. Brothers at the risk and responsibility of the defendant and that the defendant was liable to pay the price thereof. It was asserted that the defendant was merely controlling the supply and distribution of iron and steel and that the liability to pay the price of any goods dealt with by it in the exercise of its powers of control rested upon the party receiving the goods. Another plea taken was that the suit was not maintainable in view of the provisions of Sec. 175 (3) of the Government of India Act, 1935, which enjoins that a contract between the Government of India and a third party has to be in writing and in a particular form. It was emphasized that G. Brothers alone were liable for the payment demanded by the plaintiff company.