SRIVILLIPUTTUR MUNICIPAL COUNCIL Vs. KGAARUNACHALA NADAR

JUDGEMENT

(1.) Under Ordinance 9 of 1914 and the rules prescribed thereunder the plaintiff's were appointed wholesale dealers of rice at Sattur. The defendant Municipal Council of Srivilliputur appointed a Local Emergency Committee for the purchase of rice from the plaintiffs. This Local Committee used to indent for the monthly supply and the Collector allotted the quantity to be supplied. In January 1920 the defendant Municipality applied for a certain

(2.) For the appellant it is contended that a breach of a statutory Regulation does not fall under Section 65, Contract Act. Annada Mohan Roy V/s. Gour Mohan Mullick AIR 1923 PC 189 is strongly relied on. There, there was a contract by a Hindu to sell immovable property to which he was the next reversionary heir-expectant upon the death of a widow in possession and to transfer it upon possession accruing to him. It was held that this being void under Section 6 (a), T.P. Act, 1882 the time at which such an agreement is "discovered to be void" so that a cause of action to recover the consideration arises under Section 65, Contract Act, 1872, in the absence of special circumstances is from the date of the agreement. Their Lordships held (p. 937 of 50 Cal.) that Section 65 did not apply to such a contract. In that case another Privy Council case Harnath Kunwar V/s. Indar Bahadur Singh AIR 1922 PC 403 was pressed upon their Lordships. In the latter case a Hindu, while next reversioner to an Oudh estate, obtained a decree declaring that a will which the widows of the last holder alleged authorized them to adopt was invalid and that he was entitled to the estate upon the death of the last surviving widow. Prior to that event occurring he purported to sell half the estate in consideration of Rs. 25,000 advanced to him declaring by the sale-deed that when he succeeded he would put the vendee in proprietary possession. After the death of the last surviving widow the widow of the purchaser sued the vendor for possession, or alternatively to recover the purchase money with interest. It was held that there was no effectual transfer of the villages, since the vendor had only an expectancy and the decree did not create any greater interest in him but that under Section 65, Contract Act, 1872 the purchase money was recoverable, with interest from the date of the suit, the period of limitation not running until the rights of the purchaser were discovered to be unenforceable. The facts of that case are peculiar and their Lordships held that in those peculiar circumstances there was a misapprehension as to the private rights of the vendor which he purported to sell and that the true nature of those rights was not discovered by the plaintiff earlier than the time at which his demand for possession was resisted. The agreement was discovered to be void and the discovery in their Lordships view was one within the words and the meaning of Section 65, Contract Act. This difference is stressed by their Lordships in Annanda Mohan Roy V/s. Gour Mohan Mullick AIR 1923 PC 189 at p. 935 (of Cal. 50) where they say: In that case, however, there were special circumstances wholly different from those in the present case, circumstances which were proved in evidence and were sufficient for their Lordships to act upon and to enable them to say that the discovery in the case was later than the date of the contract itself.

(3.) These are the two important Privy Council cases relied on one by each side respectively. The case in Harnath Kunwar V/s. Indra Bahadur Singh AIR 1922 PC 403 cannot be taken as authority for saying that a contract entered into in breach of the statutory provisions of Secs.44 and 45, District Municipalities Act can be brought under Section 65, Contract Act for purposes of a "quantum meruit" or a quantum valebant." In Veeranna Ambalam V/s. Ayyaahi Ambalam AIR 1926 Mad 168 it was held that a contract which was necessarily invalid from its inception would not fall under Section 65. In Radhakrishna Das V/s. The Municipal Board of Benares (1905) 27 All 592 at p. 601 the learned Judges consider the applicability of Section 65, Contract Act in a case exactly similar to the present. They say: There was no illegality in the action of the Municipality in passing a resolution (accepting the appellant's tender and therefore it cannot be said that the agreement, if any, constituted by the tender and acceptance of it, has been discovered to be void. The agreement is unobjectionable but it did not ripen into a binding contract by reason of the neglect of the parties to comply with the provisions of the section under which the Municipality could alone contract. The words of the section, namely "When a contract becomes void" evidently have no application because there was no contract. If we were to hold that this section was applicable, we should render nugatory the salutary provisions of the Municipalities Act which provide that "a contract executed otherwise than in conformity with it shall not be binding on the Board." Likewise Section 70 appears to us to have no application.