PANNALAL Vs. DEPUTY COMMISSIONER BHANDARA

JUDGEMENT

(1.) These three appeals have come to this Court a second time by way of a certificate granted by the High Court of Bombay. The appellant filed three suits, Civil Suit No. 1-B of 1948 for Rupees 12,000/-, Civil Suit No. 2-B of 1948 for Rs. 31,028/- and Civil Suit No. 3-B of 1948 for Rs. 21,381/- for the work of additions and alterations to three hospitals, Kunwar Tilak Singh Hospital at Gondia, Bai Gangabai Hospital at the same town and Twynam Hospital at Tumsar, all in Bhandara District, then in the State of Madhya Pradesh and now in the State of Maharashtra. In December 1943 he entered into three contracts in relation to the above three hospitals with Mr. Tiwari, the then Deputy Commissioner of Bhandara District. He was paid various amounts in respect of the work done for these three hospitals and dispute having arisen in respect of the appellant's claim for the balance of the amounts due in respect of these three contracts, the appellant filed the above three suits. In two of these suits he made the Government of Madhya Pradesh as well as the Deputy Commissioner parties. The Deputy Commissioner, Mr. Tiwari, was also made a party in his personal capacity. He also made the Dispensary Fund Committee another defendant in each of the suits and as the Committee was not a statutory body he impleaded all its members as parties. In respect of Bai Gangabai Hospital the State Government, the Deputy Commissioner, the Municipal Committee of Gondia, which owned the hospital, as also Mr. Tiwari in his personal capacity were made parties. The trial Court decreed the suits against the State Government alone. The amounts decreed were Rs. 8,214/- in C.S. No. 1-B, Rupees 19,298/- in C. S. 2-B and Rs. 12,765-15-0 in C. S. No. 3-B. These were to carry interest, past and future. The State Government took the matter on appeal to the High Court of Judicature at Nagpur. The appellant did not file any cross-objections in spite of the failure of the trial Court to pass decrees against the other defendants. By the time the appeals came up for hearing Bhandara District became a part of the State of Maharashtra. The High Court of Bombay allowed the appeals filed by the State. The High Court also declined to exercise its powers under Order 41, Rule 33 of the Code of Civil Procedure against the other defendants. On appeal this Court set aside the order of the High Court refusing to consider the claim against the other defendants under Order 41, Rule 33 and remanded the case back to the High Court. This Court, however, confirmed the judgment of the High Court as far as the dismissal of the suit against the State was concerned. The High Court again dismissed the suits and the matter has again come before this Court by way of leave granted by the High Court of Bombay. It appears that sinch then the State of Maharashtra has taken over the Kunwar Tilak Singh Hospital and the Twynam Hospital and, therefore, the only question to be decided in two of these three appeals is the liability of the State of Maharashtra for any sums that may be found due to the appellant in respect of these two hospitals. The Bai Gangabai Hospital is even now owned by the Municipal Committee, Gondia and its liability also is to be determined.

(2.) The exact status of the Dispensary Fund Committee is not very clear. It does not appear to be a statutory body nor does it appear to be a permanent body. It seems to be something of an ad hoc body appointed by the Deputy Commissioner and consisted of a number of officials and a few non-officials. The Deputy Commissioner himself was not a member of the body. It appears, however, as we would show later, that the Deputy Commissioner was acting on behalf of this body with the tacit approval of the Committee itself. The contracts were signed by the Deputy Commissioner as Deputy Commissioner but not on behalf of the State; nor did they say that they were on behalf of the Dispensary Fund Committee or the Municipal Committee. But in his evidence Mr. Tiwari stated that he entered into the agreement on behalf of the Gondia Municipal Committee and the Dispensary Fund Committee, and not in his personal capacity or in his capacity as Deputy Commissioner and that the idea was that the funds will be forthcoming if he signed the agreement and the work will be more readily done. There being no dispute that the work in respect of all these three hospitals was done by the appellant and the ownership of the hospitals vests in one case with the Gondia Municipal Committee and in the other two cases with the Government of Maharashtra, only two questions arise for decision, (i) what is the amount due, and (ii) are the Municipal Committee of Gondia and the State of Maharashtra liable either on the basis of the contracts or under S. 70 of the Contract Act.

(3.) As regards the amount due, the contract itself provided that the rates were to be increased subject to increases in the PWD schedule of rates. The contracts were in standard PWD form and the rates were also the PWD schedule of rates. There had been an increase of 50 per cent in August 1943 over the PWD schedule of rates. That was before the contracts in question were entered into. Subsequently on 22-1-44 the PWD rates were again raised by 20 per cent. The Deputy Commissioner had also sanctioned the increased rates and extended the time for work as is seen from Exts. P-8 and P-9 in C. S. No. 1-B of 1948. The letter of the Deputy Commissioner, Bhandara dated 6-10-1945 in reply to the letter of the appellant's advocate found at pages 428-430 of the paper book, shows that the appellant claimed Rupees 76456-2-6 for Tumsar Hospital. The total cost calculated according to the agreement rates worked out to Rs. 53820-0-0, out of which he had already been paid Rs. 53,641-8-0. It also shows that the appellant claimed Rs. 28906-8-0 for Kunwar Tilak Singh Hospital and that the total cost worked out on the basis of the agreement came to Rs. 20798/- out of which the appellant has already been paid Rupees 20,058-4-0. In respect of the Gangabai Hospital the appellant's demand was Rs. 59598/- but the total cost calculated according to the agreement rates was Rs. 44099/- and the appellant had actually been paid Rs. 45477/-. Mr. Santaram, the Engineer who supervised this work had admitted that there was really no quarrel regarding measurements and the only dispute was with regard to the rates. In view of the stipulation in the contract, already referred to, there is no doubt that the appellant would be entitled to a 20 per cent increase in the PWD rates which came into force on 22-1-44 by Slip No. 4 of the Mahanadi Circle Superintending Engineer's memo. The trial Court has made elaborate calculations and arrived at the figures for which the appellant was entitled to a decree. As the appellant can succeed in this case on the basis of Section 70 of the Contract Act we think it would be a fair way of assessing the benefit obtained by the defendants to award the appellant 20 per cent of amount calculated according to the agreement. These figures have already been mentioned. The appellant would, therefore, be entitled to 20 per cent of Rs. 53,820 plus the balance of the amount due even according to the contract rate i.e. Rs. 53,820-53,641-8-0 in respect of the Twynam Hospital, Tumsar in Civil Appeal No. 1073/67, that is Rs. 10,942-50. He would be entitled to 20 per cent of Rs. 20,798 plus the balance which was due to him even according to the contract rate i.e. Rs. 20,798-20,053-4-0 in Civil Appeal No. 1072/67 for Kunwar Tilak Singh Hospital, that is Rs. 4,899-35. In respect of the Gangabai Hospital, Gondia he would be entitled to 20 per cent of Rs. 44,099 and from this will be deducted what has been overpaid to him i.e. Rs. 45,477-44099 in Civil Appeal No. 1071/67, that is Rs., 7441-80. The decree in this case will be against the Municipal Committee, Gondia whereas in the two earlier cases it will be against the State of Maharashtra.