STATE OF BIHAR Vs. MOTILAL CHAMARIA

JUDGEMENT

(1.) THE defendants are the appellants in First Appeal No. 382 of 1959, whereas plaintiffs are the appellants in the other appeal. First Appeal No. 384 of 1959, and these two appeals arise out of Money Suit No. 106 of 1952 instituted by the plaintiffs for recovery of a sum of Rs. 2,34,213/3/0 in the following circumstances: Plaintiff alleged that he was the solo proprietor of the concern "Rai Bahadur Hardutta Rai Motilal Jute Mills" (Plaintiff 2). Plaintiffs' case was that they entered into a contract with the Regional Grain Supply Officer of Purnea who was acting on behalf of the State of Bihar on 17-8-1946 for the supply of one lac maunds of local paddy at the- rate of Rs. 6/12/- per maund and one and a half lac maunds of Nepal paddy at the rate of Rs. 7/2/-per maund. Besides that, there was also a contract for the supply of rice and the plaintiffs performed their part of the contract to the entire satisfaction of the Government and there was no dispute between the parties regarding any supply of paddy and rice. Plaintiffs submitted their bill on 17-1-1947 charging an actual shortage at the rate of 11/2 seers per maund in respect of the supply of paddy and rice and the amount with regard to that shortage came to Rs. 43,314/1/9. At the time of the final adjustment of the said bill, the District Supply Officer, Purned, allowed shortage at the rate of 3 chataks only per maund (1/2% per hundred maund), the amount of which at that rate came to Rs. 3,810/6/-; in other words, he did not allow shortage to the extent, of Rs. 39,503/11/9. Plaintiffs had to purchase paddy sometimes in Nepal and on other occasions in the district of Purnea, carry it to the nearest godowns and store it for a considerable period before despatching it to different districts and mills under Government orders. THEre was thus a shortage under four heads: (i) on account of dryage during the period the paddy was kept in godown, (ii) while carrying paddy from villages and market to godowns (iii) ravages by rats and other insects, and (iv) while carrying paddy from godown to Rail heads for despatch. This claim for Rs. 39,503/11/9 was mentioned in item (A) of the schedule of the plaint. Plaintiffs had to pay rent of the various godowns in Nepal and in Purnea district for storing the paddy and they paid rent to the extent of Rs. 79,272/6/6, but the claim made in respect thereof in the bill dated 13-1-1947 was disallowed without any justification. This formed the subject-matter of the claim indicated in item (B) of the plaint schedule. Plaintiffs supplied 1,04,884 maunds 23 seers of local paddy, but the District Supply Officer deducted 5602 maunds 11 seers and did not pay the price thereof, although the Government was liable to pay it. THE plaintiffs were entitled to a sum of Rs. 39,215/14/-and this was mentioned in item (C) of the schedule-During the period of Barter scheme, Government had directed the plaintiffs to pay 20% of profit on the purchase of cloth to the importers and those importers used to retain 81/2% as their own profit and they had to deposit the remaining 111/2% in the government treasury according to the rules. Plaintiffs paid full amount on account of the price of the cloth and the profit at the rate of 20%, but, in spite of that, the District Supply Officer wrongly deducted a sum of Rs. 29,7747, from their bill dated 13-1-1947. If the importer did not deposit the required amount, it was their fault and the plaintiffs were not liable to pay any sum on their behalf. This claim was mentioned in item (D) of the schedule. According to the Barter scheme, the plaintiffs supplied 11,840 maunds of paddy to Katihar Rice and Oil' Mills and they were entitled to get from the Government 47,360 yards of cloth but they got only 7,104 yards of cloth. In that manner, 42,256 yards of cloth were still due and the price thereof at the rate of Re. 1/- per yard came to Rs. 40,256 indicated in item (E) of the schedule. THE plaintiffs had to supply rice to the Government at a very low rate and they were supplied cloth to be sold in Nepal so that they might compensate themselves for the loss suffered by them by the sale of the cloth in Nepal at a profit; Apart from these, the plaintiffs supplied to the Government 92,208 maunds 12 seers of paddy according to the cloth Barter scheme, but they got quota of cloth in yardage in respect of 82,054 maunds only and not in respect of 10,154 maunds of paddy. THEy were entitled to 4 yards of cloth per maund and at that rate they were to get 40,617 yards of cloth the price whereof came to Rs. 40,617 at the rate of Re, 1/- per yard. This sura was specified in item (F) of the schedule. THEre were two other transactions and the first one was that the plaintiffs supplied 1279 maunds 23 seers of hand-pound rice to Rai Bahadur Hardutta Rai Motilal jute Mills for the labourers at the rate of Rs. 12/- per maund as fixed by the Government authorities, but the Government deducted the price thereof at the rate of Rs. 16/-per maund from the bill of the plaintiffs with the result that they sustained a loss at the rate of RS. 4/- per maund. THE plaintiffs were thus entitled to get from the Government a sum of Rs. 5,118/5/- mentioned in item (G) of the schedule. THE other transaction was that the plaintiffs supplied 7143 maunds 23 seers of paddy to the same mill for the labourers at the contracted and fixed rate of Rs. 6/12/- per maund, tout the Government deducted the price thereof at the rate of Rs. 9/8/- per maund. THE plaintiffs were accordingly entitled to the difference at the rate of Rs. 2/12/- per maund and the claim in respect thereof came to Rs. 19,645/13/6 item (H) of the schedule. In respect of the supply of paddy, the plaintiffs claim transport shortage to the extent of 120 maunds of paddy and the price thereof came to Rs. 810/- and this was mentioned in item (I) of the schedule. THE plaintiffs made several representations and demands, but they were not attended to and ultimately they served tho notices under Section 80 of the Civil Procedure Code on the State of Bihar and the Collector of Purnea in respect of their claim. THE cause of action, according to them, arose on 22-9-1951 when the deductions were made from their bills. THE various sums mentioned in items (A) to (I) of the schedule came to Rs. 2,34,213/2/9 for the recovery of which the plaintiffs instituted this suit on 16-9-1952 against (i) the State of Bihar, (2) the Regional Grain Supply Officer, Purnea, (3) the District Supply Officer, Purnea, and (4) Mr. S. K'. Aikat, but they expunged the Regional Grain Supply Officer and Mr. S. K. Aikat from the category of defendants.

(2.) THERE were three written statements on behalf of the State of Bihar (defendant 1). In the first one, a plea of limitation was taken and in paragraph 7 it was stated that the alleged transactions were conducted according to the prescribed procedure, orders, rules and instructions of the Government and they were closed at the termination of the department of the Regional Grain Supply in the early part of 1948. It was asserted in various paragraphs that the claims of the plaintiffs were vague, ambiguous and wanting in details. With regard to the bill dated 17-1-1947 regarding shortage, the allegation was that it was never submitted to the District Supply Officer, Purnea. The claim with regard to the rent of the godowns also was denied. Another assertion was that the cause of action did not arise on 22-9-1951 and the transactions having been finally closed in the early part of 1948 the suit was belated, and barred by time. The second written statement dated 5-11-1954 filed about a year and a half after the first one is more comprehensive. The defendant emphatically denied the statement of the plaintiffs made in paragraph 2 of the plaint and asserted that there was no contract between the plaintiffs and the defendant. The various items of claim were separately referred to in this written statement and the defendant alleged that there was no contract or agreement for allowing transit shortage and other shortages. Shortage and shrinkage were, however, allowed at the rate of 1/2% according to the prescribed procedure and the plaintiffs were not entitled to anything besides a sure of Rs. 3,810/6/-. With regard to the claim in respect of the price of 5602 maunds 11 seers of paddy, defendant 1 stated that 5482 maunds n seers of paddy were despatched by other agents, namely, (1) Katihar Rice and Oil Mills and (2) Nathmal Dugar but they did not produce acknowledgment of the consignees in respect of the receipt of the said quantity of paddy. With regard to the claim of Rs. 29,774/- in respect of cloth supplied under Barter scheme, the position was that Katihar Cloth Importing Company was the concern of the plaintiffs themselves and the proprietor of Nandram Satyanarayana was a partner of the said Importing Company. That being so, the Government had rightly deducted a sum of Rs. 29,774/- on account of the failure of the importers to deposit the requisite sum at the rate of 111/2% out of the margin of profit of 20%. The cloth Barter scheme came to an end on 15-12-1946 and the Government had already made over to the plaintiffs cloth in respect of ' the supply made while the same scheme was in force but the plaintiffs were not entitled to any cloth in respect of the supply of paddy which was after the 15th December, 1946. In fact, the plaintiffs had taken in excess 65245 yards of cloth and the defendant had a right to make a claim in respect of that excess. With regard to the other two claims in respect of Rs. 5,118/5/- and Rs. 19,645/13/6 mentioned in items (G) and (H) of the plaint, it was averred that the Government was entitled to charge the price at the local wholesale rate which had authoritatively been fixed then and the claims were not sustainable. The defendant reiterated the bar of limitation in respect of the suit. The third written statement contained a plea that plaintiff 2 was a partnership firm, but the said firm not having been registered under the Indian Partnership Act the suit at the instance of the plaintiffs was not maintainable.

(3.) CERTAIN points are common in these appeals and it will be convenient to deal with them at one place. Learned Government Pleader raised a question that there was no written contract or agreement between the plaintiffs and the State oi Bihar for the supply of paddy and rice and, according to him, the plaintiffs did not allege in their plaint that there was a written agreement either on 17-8-1946 or subsequently in respect of the supply of paddy. He contended that, in case there was no written contract, then there was non-compliance of the provisions of Section 175 (3) of the Government of India Act, 1935, and the plaintiffs were not entitled to make any claim in respect of a contract which was invalid and unenforceable. (His Lordship after discussing the evidence proceeded:) Having regard to all these circumstances, I am of the opinion that there was a written contract between the plaintiffs and the Regional Grain Supply Officer of Purnea acting on behalf of the State of Bihar. The other question, as to whether the said contract was validly entered into by the Regional Grain Supply Officer does not arise at all, inasmuch as defendant I did not take that objection in any of the three written statements. It was necessary to take the plea that there was a non-compliance of the provisions of Section 175 (3) of the Government of India Act, 1935, and, in absence of that, learned Government Pleader could not take any objection on that score. It was held in Dominion of India v. Bhikhraj Jalpuria, (S) AIR 1957 Pat 586 that the question whether or not the provisions of Section 175 (3) had been complied with was purely a question of fact and, therefore, had to be pleaded, and unless the facts constituting the invalidity of the contract were mentioned in the written statement, it was not incumbent upon the plaintiff to establish by evidence that the contracts were valid and legal.