UNION OF INDIA Vs. DHANSAR COAL CO LTD

JUDGEMENT

(1.) In the suit which is the subject-matter of this appeal the plaintiff prayed for recovery of a sum of Rs. 838/- on account of the price of 21 tons and 7 cwt. of hard coke supplied to the Craig jute Mills, Kankinara, which belongs to the Military Department of the Government of India. It appears that a sanction for the supply of the hard coke was granted by the Deputy Coal Commissioner of Calcutta on 7-3-1949, and in accordance with that sanction the plaintiff despatched one wagon of hard coke weighing 21 tons and odd to No. 1 Engineering Equipment Works, I.E.M.E. Craig Jute Mills, Kankinara. As the bill for the price of the coke was not paid, the plaintiff entered into correspondence with the Controller of Army Factory Accounts and learnt that the consignment of coke was rejected as it was not up to the specification. It appears that the Deputy Coal Commissioner, Calcutta, directed the Deputy Director of Fuels, Calcutta, to arrange for the disposal of the coke in question and for payment of the price realised by the sale to the plaintiff. The suit was contested by the defendant, the Union of India on the ground that the coke was rejected because it was not up to the specification mentioned in the contract and the plaintiff was not entitled to recover any amount for the supply of that coke. In the written statement it was mentioned that the coke was still lying at Kankinara at the Engineering Equipment Works at the risk of the plaintiff and that the disposal of that coke was stayed because the plaintiff had instituted the suit. Both the lower Courts have come to the finding that the coke supplied was not up to the specification but granted a decree to the plaintiff for a sum of Rs. 378/- only with proportionate costs because there was an order of the Deputy Coal Commissioner to dispose of the coal and the liability arose under Section 70 of the Indian Contract Act.

(2.) In support of this appeal two arguments have been submitted on behalf of the appellant, the Union of India. It was contended in the first place that Section 70 of the Contract Act has no application to the present case and the matter is governed by Rule 10-A (1) of the Colliery Control Order, 1945, which runs as follows :

(3.) In our opinion, the present case is governed not by Section 70 of the Indian Contract Act but by the statutory provisions contained in Rule 8 and Rule 10A(1) of the Colliery Control Order. The order of disposal made by the Deputy Coal Commissioner with regard to the amount of coke is an order passed by him under Rule 8 read with Rule 10A(1) of the Colliery Control Order, 1945. In other words, the order of the Deputy Coal Commissioner is an order made in exercise of the statutory power and, therefore, the plaintiff cannot base its cause of action on Section 70 of the Indian Contract Act, The view of the lower appellate court on this point is incorrect and must be overruled. In our opinion, the suit of the plaintiff must fail and the plaintiff is not entitled to recover any amount as damages from the defendant, the Union of India.