STATE OF BIHAR Vs. THAWARDAS PHERUMAL

JUDGEMENT

(1.) This appeal by the State of Bihar (defendant) arises out of a suit for recovery of Rs. 98528/- as principal and Rs. 17241/14/- as interest from August 1953 to June 1956 at the rate of 6 per cent per annum.

(2.) Plaintiff was a partnership firm carrying on coziness at various places including Sindri. There is a factory at Sindri for manufacture of fertilizers and it is known as Sindri fertilizer Factory. By a notice dated 13-8-1946, the Government of Bihar through the Executive Engineer, Sindri Water Works Division of the Public Health Engineering Department invited tenders from contractors desiring to execute the works for settling tank and ancillary works for water supply to the Fertilizer Factory at Sindri, me plaintiff submitted tender for the said works and that tender was accepted by the Government of Bihar. By an indenture of agreement dated 1/23rd April, 1947, between the plaintiff and Governor of Bihar the latter appointed the plaintiff as contractor for the purpose of executing the works of settling tank and ancillary works at Sindri on terms and conditions mentioned therein. The Superintending Engineer Public Health Department, executed that agreement and he had full authority to do so on behalf of the Governor of Bihar. While the said work was proceeding, the Central Government in the Ministry or Labour increased the wages of labourers in the ceal mining area by a resolution published in the Gazette of India extraordinary dated 12-5-194/. Sindri was within the ambit of the coal mining area and thus the plaintiff had to pay wages at the increases rates to the labourers employed in those works according to the said resolution. The rates in the aforesaid indenture of agreement were settled on the basis of then prevailing rates of wages but they were much lower than the wages fixed by the said resolution. The plaintiff explained an these facts before the Superintending Engineer, Public Health Engineering Department, Government of Bihar, and expressed inability to execute the said works in the altered, circumstances brought about by the said resolution, appreciated the plaintiffs difficulties and promised to pay the plaintiff additional sums so that the plaintiff might pay increased wages to the labourers employed in those works. The plaintiff completed those works to the satisfaction of the authorities concerned and thereafter submitted a claim for further and additional amount which had been spent in order to pay the increased wages, me Chief Engineer or the Public Health Department scrutinised that claim and fixed it at Rs. 98528 only. The said Chief Engineer as representative and agent of the State or Bihar acknowledged the plaintiff's right to get that sum in his letter dated 30-7-1953 addressed to the Managing Director Sindri Fertilizer and Chemicals Ltd. A copy of that letter was forwarded to the plaintiff as well. The employees and the agents of the defendant promised to pay that sum to the plaintiff, but in spite of repeated demands the defendant failed and neglected to pay that amount to the plaintiff. The plaintiff sent a notice under Section 80 of the Code of Civil procedure and then instituted this suit on 30-8-1956 for the recovery of a total sum of Rs. 1,15,769/14/- (the amount of principal and interest) and made a prayer for pendente lite and future interest as well.

(3.) The defendant took several pleas and one of them was that the defendant had acted only as an agent for and on behalf of the Union of India to execute the said works for water supply to the Fertilizer at Sindri which was a concern of the Government of India and in those circumstances, the suit was not maintainable unless the Union of India was made a party to it. Another plea was that the suit was barred by limitation as the work was completed prior to three years before the institution of the suit. The defendant admitted the contract and the agreement in question, but contested the claim of the plaintiff with regard to the additional sum claimed for paying increased amount of wages to the labourers. The defendant's case was that the said resolution of the Central Government dated 12-5-1947 did not apply to the Sundri Factory and to the work of construction connected therewith. The defendant did not admit that the plaintiff had to pay increased rates to the labourers in terms of the aforesaid resolution of the Central Government, The superintending Engineer did not promise to pay any further and additional sum to the plaintiff on account of the increased rates of wages. With regard to the letter of the Chief Engineer, the position, according to the defendant, was that the recommendation of the Chief Engineer for payment of Rs. 98528 as ex-gratis payment was not accepted by the Central Government. The contract in question was binding on the plaintiff and any claim for an additional amount was not tenable.