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PATNA HIGH COURT
S.B.Sinha, J.
Central Coal Fields Ltd.
Versus
Nawajiwan Trading Company
Civil Appeal from original decree No. 147 of 1984 ;
Decided On : APRIL 11, 1991
CONTRACT - Void Contract - Recovery of Compensation - Applicability of Limitation Act - Quasi-Contract - Section 70 of the Indian Contract Act - Acknowledgment of Liability - Section 18 of the Limitation Act - Applicability of Article 18 and 113 of the Limitation Act.
Fact of the Case:
Plaintiff, a partnership firm, entered into a contract with Defendant, a company, to hire bulldozers for removing heaps of overburden and leveling coal dumps. Plaintiff's bulldozers worked for 1218.66 hours at the rate of Rs.140/- per hour. Plaintiff submitted a bill, which was misplaced. A fresh bill was sent along with a letter. Defendant acknowledged their liability to pay Rs.1,70,512.40 paise by a note-sheet. Plaintiff filed a suit for recovery of the amount.
Finding of the Court:
1. The suit was maintainable as it was instituted not only against the Defendant company but also against its officers who had a role in the transaction. 2. The contract was void as the Defendant's officer who entered into the contract had no authority to do so. 3. Plaintiff was entitled to recover compensation to the extent of the benefit derived by the Defendant in terms of Section 70 of the Indian Contract Act. 4. The note-sheet issued by the Defendant's officer did not constitute an acknowledgment of liability within the meaning of Section 18 of the Limitation Act. 5. The suit was governed by Article 18 of the Limitation Act, which provides a period of three years from the date the work is done for a suit for the price of work done at the request of the defendant. 6. The plaintiff's suit was filed within the limitation period.
Issues: 1. Whether the suit was maintainable? 2. Whether the contract was void? 3. Whether the plaintiff was entitled to recover compensation? 4. Whether the note-sheet issued by the Defendant's officer constituted an acknowledgment of liability? 5. Which article of the Limitation Act was applicable?
Ratio Decidendi: 1. A suit can be maintained against a company and its officers who had a role in the transaction. 2. A contract entered into by an unauthorized person is void. 3. A person who lawfully does something for another person or delivers something to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore the thing so done or delivered (Section 70 of the Indian Contract Act). 4. A note-sheet issued by an officer of the Defendant company, acknowledging the liability to pay the plaintiff, did not constitute an acknowledgment of liability within the meaning of Section 18 of the Limitation Act. 5. In a case where a contract is discovered to be void, the limitation for a suit for recovery of the advantage under Section 65 of the Indian Contract Act runs from the date of discovery from the contract becoming void. 6. Article 18 of the Limitation Act applies in a case where the plaintiff had sued for the price for the work done by him at the request of the defendants which implies existence of a valid contract.
Final Decision: The appeal was allowed in part. The plaintiff was entitled to recover compensation to the extent of the benefit derived by the Defendant in terms of Section 70 of the Indian Contract Act. The portion of the judgment granting interest at the rate of 6% per annum from 30th September, 1977 was set aside. The plaintiff was entitled to interest at the rate of 6% per annum from the date of the decree passed by the learned court below till realization.
S. B. Sinha, J.
1. This First Appeal is directed against the judgment and decree passed by Smt. R. Kumari, IXth Additional Subordinate Judge, ranchi in Money Suit No.121/58 of 1980-83, whereby and whereunder the suit filed by the plaintiff for recovery of a sura of Rs.2, 71, 557.78 paise was decreed in part.
2. The fact of the matter lies in a very narrow compass.
3. The plaintiff is a partnership firm registered under the provisions of the Indian Partnership Act and had entered into a contract with M/s central Coal Fields Ltd. through the General Manager (B and K) Bokaro and Kargali, P. O. Bermo, whereby and whereunder it gave on hire bulldozers to remove the heaps of over burden and to level the coal dumps in new Elected Dhori Colliery on hire at the rate of Rs.140/- per hour.
4. It appears that the bull-dozers of the plaintiff worked during the period 23-4-1975 to 17-10-1976 for 1218-66 hours, wherefor the requisite entries were made in the Log book (Ext.1 ).
5. The plaintiff prepared a bill which was misplaced by the office of the appellant. A fresh bill dated 10-8-1977 (Ext.2) was, therefore, sent by the plaintiff to the Manager of New selected Dhori Colliery (Respondent no.4) alongwith a letter dated 6-9-1977.
6. According to the plaintiff, as despite receipt of the said bill its lawful dues were not paid, it sent a notice dated 7-9-1977 addressed to the defendant-appellant No.2.
7. According to the plaintiff, the defendants acknowledged their liabilities to pay a sum of Rs.1, 70, 512.40 paise by reason of a note-sheet dated 20/30-9-1977, a copy whereof was forwarded to the plaintiff and which was marked as Ext.3/1.
8. The appellants in their written statement inter alia, contended that the suit was barred by limitation. It was further contended that prior sanction of the competent authority was not taken before placing order for engagement of the D-7 Dozers of the plaintiff.
9. It was further alleged that the competent authority turned down the recommendations on the ground that the post facto approval can not be agreed to.
10. According to the defendants-appellants, the aforementioned note-sheet dated 29-7-1977 (Annexure-3/1) and the letter dated 20/30-8-1977 do not constitute an acknowledgment so as to save limitation.
11. Upon the aforementioned pleadings of the parties, the learned c ourt below framed the following issues:-
"1. Has the plaintiff any cause of action for the suit ? 2. Is the suit maintainable as framed ? 3. Is the suit barred by law of limitation ? 4. Is the plaintiff entitled to a decree with interest as claimed in the plaint ? 5. To what relief or reliefs, if any, plaintiff is entitled ?
12. The learned court below answered all the issues in favour of the plaintiff and held that it is entitled to a decree for a sum of Rs.1,70,612.40 paise by way of hire charges on the Bull-dozers, but it instead of granting interest at the rate of 15 per cent per annum, as claimed by the plaintiff allowed interest at the rate of 6% per annum from 30-9-1977 i. e. from the date when the defendants acknowledged the claim ot the plaintiff.
13. Mr. Debi Prasad, the learned counsel appearing on behalf of the defendant appellant submitted that suit was not maintainable as against the defendant Nos.2 to 4.
14. The learned counsel further submitted that in view of the fact that the defendant-appellant No.2 had no authority to enter into the contract on behalf of the appellan No.1, no decree could have been passed in favour of the plaintiff.
15. The learned counsel counsel further submitted that in any event, as the Bull-dozers in question operated during the period 23.4.1975 to 17.10.1976, the suit was barred by limitation as the same was filed after expiry of a period of three years from the said date as it was filed on 27.9.1980.
16. The learned counsel contended that in any event, the purported note-sheet dated 29.7.1977 (EXT.3/a) does not constitute acknowledgment within the meaning of Sec.18 of Limitation Act, 1
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