RAM LABHAYA Vs. MUNICIPAL COMMITTEE

JUDGEMENT

(1.) THIS is an appeal from a decree dismissing the suit of the plaintiff for recovery of a sum of Rs. 5,058 mainly on the ground that the claim was barred by limitation.

(2.) IN the year 1952 the defendant Municipal Committee published a notice regarding the holding of a public auction on 24th April 1952 for a contract for supply of grams and other foodgrains during the period 1st May 1952 to 31st march 1953. The plaintiff was the only bidder at the public auction and by a resolution, dated 24th April 1952 the Committee accepted his offer contained in his letter, dated 26/27th March 1952. The grams were to be supplied at the control rate of Rs. 12 per maund and in addition, Re. 0-12-3 per maund were payable as transportation and grinding charges. The plaintiff was required to give security and by a letter, dated 8th July 1952, Ex. D-6 the Committee was informed that a sum of Rs. 2,535 had been actually deposited on that account and that the remaining half was to be adjusted against the bills to be submitted by the plaintiff for the supply of goods. An agreement, Ex. D-7, was executed on 8th July 1952 in which the terms and conditions were fully set out. It is common ground that the supplies of grams were made from May to August 1952. According to the plaintiff, the aforesaid commodity was decontrolled and, therefore, the prices shot up in august and for that reason the plaintiff stopped making further supplies at the agreed rates. On 8th September 1952 the Medical Officer of Health sent a notice to the plaintiff saying that the supplies of 300 maunds had not been made and an equivalent quantity was being arranged from the local market which would be on his account and at his risk and responsibility. It is unnecessary to refer to the subsequent correspondence between the parties. On 8th November 1954 the municipal Committee filed a suit for recovery of Rs. 11,309 odd from the plaintiff for damages for alleged breach of contract. The total amount of deposit amounting to Rs. 4,080 which had been made by the plaintiff by way of security was treated as having been forfeited to the Committee under the terms of the agreement, dated 8th July 1952. This suit was dismissed on 29th August 1955 on the ground that the agreement of 8th July 1952 was not enforceable at law and was null and void. The present suit was filed on 21st June 1956 for recovery of the sum of Rs. 4,080 which had been deposited by the plaintiff by way of security and Rs. 978 as interest on that amount, the total claim being for Rs. 5,058.

(3.) IT has been alleged in the plaint that the forfeiture by the defendant Committee of the aforesaid deposit was illegal and could not have been validly made under the terms of the agreement which was void. The deposit continued to remain as a security and the plaintiff was entitled to its refund. As regards limitation, it was pleaded that it was on 29th August 1955 when the judgment was pronounced in the suit filed by the defendant Committee that the purpose of deposit came to an end and till then any demand of the same could not be made as it was being treated as having been forfeited. The cause of action, therefore, accrued on 23rd december 1955 when for the first time demand was made (by a notice ). In this notice interest was also claimed at the rate of 6 per cent per annum by way of damages. Apart from other defences, the Committee pleaded the bar of limitation. The trial Court framed the following issues:-