PANDIT ISHWARDAS Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) Melaram, brother of the appellant was the highest bidder at an auction of a forest coupe. The coupe was knocked down in favour of Melaram for a sum of Rs. 93,000. Melaram executed an agreement undertaking to pay the sum of Rs. 93,000 in certain instalments. The agreement was also signed by the Divisional Forest Officer, Nimawer. The appellant, the brother of Melaram, executed a surety bond guaranteeing the payment of the instalments required to be paid by Melaram under the agreement. Melaram committed default in payment of the instalements. A sum of Rs. 38,500/- was due from Melaram to the Government. As the Government was attempting to recover the amount from the surety, namely the appellant, he filed the suit out of which the appeal arises for a declaration that the agreement between Melaram and the Government and the surety bond executed by the appellant were illegal and unenforceable. The contention was that the provisions of Art. 299 of the Constitution had not been complied with. It was also pleaded that the plaintiff was discharged from suretyship under Ss. 135 and 139 of the Indian Contract Act. The Trial Court rejected the plea of discharge from suretyship but upheld the plea based on non-compliance with the provisions of Art. 299 of the Constitution. The suit was accordingly decreed. An appeal was preferred to the high Court of Madhya Pradesh. During the pendency of the appeal the defendant was permitted to raise an additional plea that the suit was barred by res judicata by reason of the decision of the Madhya Pradesh High Court in first appeal No. 16 of 1959 affirming the judgment and decree of the Additional District Judge, Dewas in Civil Suit No. 1 of 1956. The High Court upheld the plea of res judicata and allowed the appeal. A memorandum of cross objection filed by the plaintiff in regard to the plea of discharge was dismissed as no argument was advanced in support of the cross objection. The plaintiff has preferred this appeal.

(2.) We may, at this juncture refer to the facts which gave rise to the plea of res judicata. Consequent on the default committed by Melaram the agreement was terminated and for the remaining period of the contract i.e. 16th March 1953 to 30th June 1953, there was a re-auction and the appellant himself became the contractor for the period. At the expiry of the period for which he was the contractor, the appellant was entitled to remove the timber which he had already cut but which was still lying unremoved in the coupe. Before the appellant could remove the timber the forest authorities attached and seized the timber on the ground that he was liable, as a surety to pay the amount which was due by Melaram. The appellant filed a Civil Suit No. 1 of 1956 in the Court of the Additional District Judge, Dewas, to recover damages sustained by him consequent on alleged wrongful attachment and seizure by the forest authorities. One of the questions raised by the appellant in that suit was that the agreement between Melaram and the Government was in contravention of Art. 299 of the Constitution of India as the agreement was not made by the Divisional Forest Officer, in the name of the Raj Pramukh of the State of Madhya Bharat. The contention was negatived by the Additional District Judge, Dewas and by the High Court on appeal. The High Court held that the agreement had been ratified by the Raj Pramukh and had also been acted upon by the parties. The Government was, therefore, entitled to enforce the same. The decision of the Additional District Judge, Dewas, was rendered on 6th Dec., 1958 and the High Court affirmed the decision on 3rd May, 1963.

(3.) The learned Counsel for the appellant submitted that the bar of res judicata did not apply since the parties to the two litigations were not the same, the subject-matter was different and the plea of ratification by the Raj Pramukh was not raised in the present suit. It was also contended that the judgments of the Dewas Court and the High Court in that suit were non est as the Courts had no jurisdiction to uphold a contract which was hit by the provisions of Article 299 of the Constitution. It was also argued that the High Court should not have permitted the respondent to raise the plea of res judicata at the appellate stage since that plea could not be decided without receiving additional evidence, namely, the judgment in the other litigation.