K PERUMAL MUDALIAR Vs. PROVINCE OF MADRAS

JUDGEMENT

(1.) The only point that arises in this appeal is whether the suit contract is valid, and whether it complies with the provisions of Section 175, Government of India Act, 1935.

(2.) The defendant is merchant carrying on business in Coimbatore. The Government required groundnut oil for use in the Government Oil Factory at Calicut. The Superintendent of the Kerala Soap Institute wrote EX. p.-1 dated 12th May 1942, to the defendant asking him to quote his lowest rate for supplying 40 tons of expeller quality groundnut oil for prompt supply. The defendant by his letter, Ex. P.-2, dated 15th May 1942, offered to supply 40 tons of expeller groundnut oil at the rate of Rs. 369 per nett ton of 2240lbs, if barrels were supplied by the Superintendent. He agreed to deliver the said oil within three months after acceptance. The defendant received the letter, EX. P.- 9, dated 21st May 1942, from the Superintendent of the Kerala Soap Institute, wherein the latter stated that he tested the sample of oil received and accepted the offer of the defendant. He also informed the defendant that the oil agreed to be delivered should be sent within three months, and that the bulk supplied should be exactly similar to the sample. On 21st May 1942, the Superintendent again wrote a letter to the defendant asking him to supply the groundnut oil, particulars whereof were given in that letter, within three months as agreed upon between the. parties. For one reason or other it is not necessary to go into that question--the defendant did not supply the oil agreed upon between the. parties within the time prescribed.

(3.) The Government purchased the oil from, a third party, and filed the suit for recovery of damages, the difference between the price at which the defendant agreed to sell and the price for which they later on purchased from the third party. The defendant inter alia contested the suit on the ground that the contract which afforded the cause of action to the plaintiff was not valid, as it did not comply with the provisions of Section 175, Government of India Act, 1935. The learned Subordinate Judge held that the contract was valid, and that it also complied with the provisions of Section 175, as the Superintendent, who called for the tender and accepted it, took the sanction of the Director of Industries.