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SUPREME COURT OF INDIA
J.C. SHAH, V. RAMASWAMI AND G.K. MITTER, JJ.
Mulamchand, Appellant
Versus
State of M.P., Respondent.
Civil Appeal No. 393 of 1965,
D/-20-2-1968.
Advocates appeared
Mr. D. N. Mukherjee Advocate, for Appellants Mr. I. N. Shroff. Advocate, for Respondent.
Where any person acquired the rights to propagate lac collect tendu leaves and gather fruits and flowers of Mahua leaves, whatever rights such person had acquired from the proprietor ceased to have effect by the operation of section 4 (1) (a) of the Abolition Act. Such rights are in the nature of proprietary rights falling within section 4 (1) (a) and upon issue of a notification under section 3, the rights of such person passed and became vested in the State Government. The rights created by the ex-proprietor do not fall under section 5 of the Abolition Act. 1963 JLJ 1=1963 RN 1 (SC) followed. 1953 SCR 476 held to be overruled. 1961 JLJ 943=ILR 1961 MP 837 confirmed. (See page 71, Twelve Years' Digest).
(Para 4)
(2) Constitution of India – Article 299–contract not entered into in compliance with the provisions–is not enforceable–such contract cannot be ratified and there cannot be any estoppel–provisions are mandatory–in proper cases compensation under section 70, Contract Act, may be awarded.
(3) Government of India Act, 1935 – S. 175 (3)–contract not entered into in compliance with the provisions–is not enforceable-such contract cannot be ratified and there is no question of estoppel–provisions were mandatory–in proper cases compensation under section 70, Contract Act, may be awarded.
Where a contract between the State and a private individual is not in the form required by Article 299 of the Constitution or section 175 (3) of the Government of India Act, 1935, it is void and cannot be enforced. (1952) 2 SCR 880 & (1962) 1 Supp: SCR 876 followed.
The principle is that the provisions of section 175 (3) of the Government of India Act, 1935 or the corresponding provisions of Article 299 (1) of the Constitution of India are mandatory in character and the contravention of these provisions nullifies the contracts and makes them void. There is no question of estoppel or ratification in such a case. The reason is that the provisions of section 175 (3) of the Government of India Act and the corresponding provisions of Article 299 (1) of the Constitution have not been enacted for the sake of mere form but they have been enacted for safeguarding the Government against unauthorised contracts. The provisions are embodied in section 175 (3) of the Government of India Act and Articles 299 (1) of the Constitution on the ground of public policy–on the ground of protection of general public and these formalities cannot be waived or dispensed with. If the plea of the respondent regarding estoppel or ratification is admitted, that would mean in effect the repeal of an important constitutional provision intended for the protection of the general public. That is why the plea of estoppel or ratification cannot be permitted in such a case. But if money is deposited and goods are supplied or if services are rendered in terms of the void contract, the provisions of section 70 of the Indian Contract Act may be applicable.
(4) Contract Act, 1872 – S. 70–applicability of–conditions necessary–restitution when may be claimed.
In order to invoke the provisions of section 70, Contract Act, the first condition is that a person should lawfully do something for another person or deliver something to him, the second condition is that in doing the said thing or delivering the said thing he must not intend to act gratuitously and the third condition is that the other person for whom something is done or to whom something is delivered must enjoy the benefit thereof. If these conditions are satisfied, section 70 imposes upon the latter person the liability to make compensation to the former in respect of or to restore, the thing so done or delivered. The important point to notice is that in a case falling under section 70 the person doing something for another or delivering something to another cannot sue for the specific performance of the contract nor ask for damages for the breach of the contract, for the simple reason that there is no contract between him and the other person for whom he does something or to whom he delivers something. So where a claim for compensation is made by one person against another under section 70 it is not on the basis of any subsisting contract between the parties but on a different kind of obligation. 1943 AC 61 & (1948) 1 KB 343 relied on.
(Para 6)
It is well established that a person who seeks restitution has a duty to account to the defendant for what he has received in the transaction from which his right to restitution arises. In other words, an accounting by the plaintiff is a condition of restitution from the defendant.
(Para 7)
Judgement
RAMASWAMI, J. :- This appeal is brought by certificate on behalf of the plaintiff from the judgment of the High Court of Madhya Pradesh dated March 21, 1961 in First Appeals Nos. 34 and 64 of 1958.
2. The appellant had purchased a right to pluck, collect and remove the forest produce like lac, tendu leaves etc. from the proprietors of the different Malguzari jungles for the years 1951, 1952 and 1953 as detailed in Sch. A attached to the plaint. This right he had acquired before the proprietary rights in those forests came to vest in the State of Madhya Pradesh under the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act. 1950 (Act No. 1 of 1951), hereinafter called the Abolition Act and the right was to be enjoyed by the appellant after April 1, 1951 on which date the proprietary rights came to vest in the State of Madhya Pradesh. It was alleged by the appellant that the Deputy Commissioner of Balaghat acting under Section 7 of the Abolition Act took charge of the entire Malguzari jungles on April 1, 1951 and prevented the appellant from enjoying the rights he had already acquired. In the month of April, 1951 the Deputy Commissioner auctioned the forest produce of villages covered under the purchases of the appellant. Out of the forest produce only the tendu leaves crop for the year 1951 was allowed to be enjoyed by the appellant on his depositing a sum of Rs. 3,000/- in the Government Treasury, Balaghat under a written permit dated April 30, 1951. The deposit was made by the appellant to save the tendu leaves crop of 1951 from being sold to others by the Deputy Commissioner of Balaghat. The case of the appellant was that he was entitled to the refund amount as the right to collect tendu leaves for the year 1951 had already been purchased by him. Similarly, the appellant claimed refund of the amount of Rs. l 0,000/- which he was required to deposit towards the right to collect lac from those forests for the years 1951, 1952 and 1953. The refund was claimed on the basis that there was no valid contract between the appellant and the State of Madhya Pradesh as the provisions of Art. 299 of the Constitution were not complied with and the contract was void. The respondent contested the suit mainly on the ground that the Deputy Commissioner, Balaghat had validly taken charge of the Malguzari jungles under the provisions of the Abolition Act and the appellant having removed lac from the jungles on the basis of the contract, was not entitled to any refund. The trial Judge held that the appellant was not entitled to claim the refund of the sum of Rs. 10,000/-, firstly on the ground that the contract was good even though not in conformity with Art. 299 of the Constitution, and secondly, because the appellant was allowed to enjoy the right of collecting lac and the appellant actually availed himself of that right. As regards the appellant s claim for damages for breach of contract. the trial court was of the view that the contracts were mere licences and enforceable against the State of Madhya Pradesh even after vesting of the proprietary interests under the Abolition Act. Acting in accordance with the view expressed by this Court in Chhotabhai Jethabai Patel and Co. v. The State of Madhya Pradesh, 1953 SCR 476 the trial court held that the appellant was entitled to enforce the contracts against the State of Madhya Pradesh and was consequently entitled to damages for breach of the contracts. The trial court accordingly gave a decree in favour of the appellant to the extent of Rs. 57,281/- and dismissed the rest of the claim of the appellant. The State of Madhya Pradesh took the matter in appeal to the High Court of Madhya Pradesh. The appellant also preferred an appeal to the High Court with regard to the claim which was disallowed by the trial court. By its judgment dated March 21, l961, the High Court allowed the first appeal of the respondent and set aside the decree of the District Judge i
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