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1968 Supreme(Pat) 177
PATNA HIGH COURT
N.L.Untwalia and S.Wasiuddin JJ.
Ram Swarup Maru
Versus
State Of Bihar
Appeal from Original Decree No. 454 of 1963 ;
Decided On : NOVEMBER 14, 1968
A person who has enjoyed the benefit of something delivered to him by another person under a void contract is liable to pay for it under the principles of Section 70 of the Indian Contract Act.
Headnote:
CONTRACT - VOID CONTRACT - RECOVERY OF MONEY PAID UNDER VOID CONTRACT - PRINCIPLES OF SECTION 70 OF THE INDIAN CONTRACT ACT - APPLICABILITY TO CITIZENS, CORPORATIONS AND GOVERNMENT - ACCOUNTING BY PLAINTIFF - CONDITION OF RESTITUTION FROM DEFENDANT - STRICT AND TECHNICAL VIEW OF PLEADING NOT TO BE TAKEN - MALA FIDE INTENTION AND WRONGFUL GAIN - ENRICHMENT BY ENJOYING BENEFIT OF THING DELIVERED.
Fact of the Case:
The plaintiff, the State of Bihar, filed a suit against the firm Messrs. Ganesh Rice Mill and its proprietor, Ram Swarup Maru, for the recovery of Rs. 29,492/10/3 pies. The plaintiff's case was that the defendants worked as purchasing and milling agents of the plaintiff during the years 1946-47, 1947-48 & 1948-49 under the grain supply scheme sponsored by the plaintiff. They had to supply rice extracted from paddy supplied to them on plaintiffs account at such scale, rate and quality as may be fixed by the prescribed authority on behalf of the plaintiff. The defendants executed an agreement dated 30-3-1948 to this effect. The plaintiff further claimed that the defendants received in all 22,748 maunds 2 seers of paddy from the plaintiff during the periods aforesaid including 16 maunds of paddy which was the balance due of the year 1946-47. The defendants were liable to supply 14.201 maunds 27 seers and 6 chhataks of rice to the plaintiff in lieu of the paddy received but they supplied only 13,620 maunds of rice on plaintiffs account between March, 1948 to March, 1950. They did not supply the balance of 581 maunds 27 seers 6 Chhataks of rice and retained the same with mala fide intention for wrongful gain and as such they are liable to pay the equivalent price of rice not supplied by way of damages to the plaintiff. The plaintiff has claimed a sum of Rs. 9.307/-on account of the price of rice at Rs. 16/-per maund and has adjusted a sum of Rs. 7,127/8/- that was payable to the defendants by the plaintiff against the account in question on account of their milling charge etc. due from the Government. The balance claimed is Rs. 2,179/8/-. The next item of claim was a small sum of Rs. 80/8/- on account of excess payment for cartage allowance on certain quantity of rice despatched. The plaintiffs case further is that the defendants were supplied 58,000 new gunny bags and 38,092 once used gunny bags (which herein after will be referred to as the old bags) during the period between September, 1946 and March, 1948 while they were working as milling and purchasing agents. On accounting made by the plaintiff it was found that 24.514 new gunny bags and 3.074 old bags and 10.136 rotten bags remained with the defendants the value of which with sales tax came to Rs. 26.259/6/-. Adding to the various sums interest as per account given in schedule A appended to the plaint, the total claim in the suit as stated above, was to the tune of Rs. 29,492/10/3 pies.
Finding of the Court:
The court found that the contract between the parties was void for violation of Sec.175 (3) of the Government of India Act, 1935. However, the court held that the plaintiff could still recover the money paid under the void contract by invoking the principles of Section 70 of the Indian Contract Act. The court found that the defendants had enjoyed the benefit of the thing delivered by the plaintiff and were, therefore, liable to pay for it.
Issues: 1. Whether the contract between the parties was void for violation of Sec.175 (3) of the Government of India Act, 1935? 2. Whether the plaintiff could still recover the money paid under the void contract by invoking the principles of Section 70 of the Indian Contract Act?
Ratio Decidendi: 1. The court held that the contract between the parties was void for violation of Sec.175 (3) of the Government of India Act, 1935, as it was not executed in accordance with the prescribed procedure and did not contain the required terms and conditions. 2. The court held that the plaintiff could still recover the money paid under the void contract by invoking the principles of Section 70 of the Indian Contract Act. The court found that the defendants had enjoyed the benefit of the thing delivered by the plaintiff and were, therefore, liable to pay for it.
Final Decision: The court modified the trial court's judgment and decree and passed a decree in favor of the plaintiff for Rs. 18,733/8/- with interest pendente lite and future at the rate of 6 per cent per annum with proportionate costs.
N.L.Untwalia, J.
1. This appeal by defendant No. 2 is from the judgment and decree of the 2nd Additional subordinate Judge at Purnea passed in Money Suit No. 148/2 of 1956/1963 by which the suit of the plaintiff-respondent No. 1 has been decreed in part. The State of Bihar (Respondent No 1) filed the suit against the firm Messrs. Ganesh Rice Mill said to be also known as firm Jalalgarh Rice Mill of Jalalgarh in the district of Purnea and Ram Swarup Maru (defendant No. 2) said to be the proprietor of the firm defendant No. 1. The suit was for realisation of Rs. 29,492/10/3 pies. The plaintiffs case is that the defendants worked as purchasing and milling agent of the plaintiff during the years 1946-47. 1947-48 & 1948-49 under the grain supply scheme sponsored by the plaintiff. They had to supply rice extracted from paddy supplied to them on plaintiffs account at such scale, rate and quality as may be fixed by the prescribed authority on behalf of the plaintiff. The defendants executed an agreement dated 30-3-1948 to this effect.
The plaintiffs case further is that the defendants received in all 22,748 maunds 2 seers of paddy from the plaintiff during the periods aforesaid including 16 maunds of paddy which was the balance due of the year 1946-47. The defendants were liable to supply 14.201 maunds 27 seers and 6 chhataks of rice to the plaintiff in lieu of the paddy received but they supplied only 13,620 maunds of rice on plaintiffs account between March, 1948 to March, 1950. They did not supply the balance of 581 maunds 27 seers 6 Chhataks of rice and retained the same with mala fide intention for wrongful gain and as such they are liable to pay the equivalent price of rice not supplied by way of damages to the plaintiff. The plaintiff has claimed a sum of Rs. 9.307/-on account of the price of rice at Rs. 16/-per maund and has adjusted a sum of Rs. 7,127/8/- that was payable to the defendants by the plaintiff against the account in question on account of their milling charge etc. due from the Government. The balance claimed is Rs. 2,179/8/-. The next item of claim was a small sum of Rs. 80/8/- on account of excess payment for cartage allowance on certain quantity of rice despatched.
2. The plaintiffs case further is that the defendants were supplied 58,000 new gunny bags and 38,092 once used gunny bags (which herein after will be referred to as the old bags) during the period between September, 1946 and March, 1948 while they were working as milling and purchasing agents. On accounting made by the plaintiff it was found that 24.514 new gunny bags and 3.074 old bags and 10.136 rotten bags remained with the defendants the value of which with sales tax came to Rs. 26.259/6/-. Adding to the various sums interest as per account given in schedule A appended to the plaint, the total claim in the suit as stated above, was to the tune of Rs. 29,492/10/3 pies.
3. Two written statements were filed by the appellant, one on 7-3-1963 and the other about a month later on 18-4-1963. The pleas taken by the appellant in the two written statements which are necessary to be stated are these The suit as framed Ss not maintainable The designation and description of defendant No. 1 indicating that Ganesh Rice Mill was also known as Jalalgarh Rice Mill is wrong and false. Defendant No. 2 was never the proprietor of the firm defendant No. 1. He was one of its partners along with seven others The partnership firm Messrs, Ganesh Rice Mill or Ganesh Rice Mill Company (whatever the name may be) was dissolved in or about the year 1951 and the firm was not in existence on the date of the suit which was not maintainable until and unless all the partners were impleaded as defendants in the suit. Ganesh Rice Mill worked as purchasing and milling agent of the plaintiff during the years 1946-47 to 1948-49 and supplied rice extracted from paddy supplied to the said mill. It was, however, not correct to say that the supply of rice was to be at such scale, ra
