STATE OF BIHAR Vs. R.B. MOTILAL CHAMARIA

JUDGEMENT

(1.) Messrs. R. B. Motilal Chamaria commenced an action in the court of the Subordinate Judge, Purnea for a decree against the State of Bihar for Rs. 2,34,213-2-9. They claimed that they had entered into contracts with the Government of Bihar to supply 1,50,000 maunds of paddy--1,00.000 maunds of local paddy at the rate of Rs. 6/12/- per maund, and 50,000, maunds of Nepal paddy at the rate of Rs 7/2/- per maund, and that they earned out the contract and submitted their bill on January 17, 1947 for the price of the paddy supplied but on final adjustment of account in respect of the paddy and other transactions relating to cloth and other claims made by them the State withheld Rs. 2,34,2132-9, claimed in the action. The amount claimed was under nine different heads as set out in the Schedule attached to the plaint:

(2.) The State of Bihar denied liability and contended that the action was barred by the law of limitation, that there being no contract executed in the manner prescribed by Section 175(3) of the Government of India Act, 1935, the action was not maintainable, and that in any event the amounts claimed were properly withheld.

(3.) In the view of the Trial Court the plaintiff had acted as purchasing agents for the State, and were entitled to recover Rs. 1,379/- out of item (A), the entire claim in respect of items (B) & (C) and Rs 774 0-0 out of item (D), and nothing in respect of items (E) to (I). Against the decree passed by the Trial Court the State as well as the plaintiffs appealed. The High Court held that the plaintiffs were vendors who had supplied goods to the State of Bihar. The High Court further held that the plaintiffs suit was governed by Article 120 of the Limitation Act and the cause of action arose on September 22, 1951 when the account was finally made up by the Government of Bihar and they declined to pay the amount "of Rs. 2 34,213/2/9 to the plaintiffs. The High Court confirmed the decree of the Trial Court in respect of items (A), (B) and (C) and allowed Rs. 29,774/- for item (D). The State has appealed to this Court, with certificate granted by the High Court.