1963 Supreme(Pat) 92

HIGH COURT OF PATNA
S. C. MISRA, G. N. PRASAD, JJ.
State of Bihar
Versus
Pirthi Chand Lall Choudhary
A. F. O. D. No. 248 of 1955
Decided On : 17-08-1963

The State is vicariously liable for the acts of its servants done in the course of their employment and within the scope of their authority.

Headnote:

STATE MANAGEMENT OF ESTATES AND TENURES ACT, 1949 - VALIDITY - NOTIFICATION UNDER SECTION 3(1) - FRACTIONAL SHARES - MANAGEMENT OF - COLLECTION OF RENTS AND PROFITS - LIABILITY OF MANAGER - WILFUL DEFAULT AND GROSS NEGLIGENCE - LIABILITY OF STATE - VICARIOUS LIABILITY - DAMAGES.

Fact of the Case:

The plaintiff, a proprietor of a large estate in Purnea, instituted a suit against the State of Bihar and the Manager appointed under the Bihar State Management of Estates and Tenures Act, 1949, for recovery of damages for loss alleged to have been caused to him on account of wrongful and illegal interference on their part with the possession and management of his estates and tenures between 1st January, 1950, and 7th August, 1950. The Act was passed to provide for the State management of estates and tenures in the then Province of Bihar. Under Section 3(1) of the Act, the Provincial Government was empowered to issue a notification declaring that the estates or tenures of a proprietor or tenure-holder, specified in the notification, shall be placed under the management of the Provincial Government. The consequences of placing an estate or tenure under the management of the Provincial Government were laid down in Section 4 of the Act. One of such consequences was that with effect from the date of commencement of the State Management, and so long such management continued, the proprietor or tenure holder ceased to have any power of management of the estate or tenure concerned or to grant valid receipts for the rents and profits arising or accruing therefrom including arrears of rent and profits which were payable to him on the date of commencement of the State Management. All such rents and profits including the arrears thereof were during the period of State management made payable to the Manager whose receipts alone were to operate as valid discharge of the dues mentioned therein. Another consequence which followed the vesting of the management of the estates or tenures in the Manager was that all suits and proceedings which might be pending in any Court at the date of the commencement of the State management in respect of any debts or liabilities of the proprietor or tenure holder, the payment of which was a charge on the estates or tenures concerned or any portion thereof, were barred or rendered null and void. But by virtue of Section 32 of the Act, all such suits and proceedings were to be instituted or continued by the Manager in his own name as representing the proprietor or tenure-holder concerned. The plaintiff's case was that the defendants had been illegally and wrongfully in possession of his estates and tenures between 1st January, 1950, and 7th August, 1950, and that on account of their negligence and wilful default, they had caused heavy pecuniary loss to him. The defendants denied the plaintiff's claim and contended that the State Management Act was a valid piece of legislation, that the notification under Section 3(1) of the Act was not in contravention of the provisions of the Act, and that the Manager had not been guilty of any wilful default or negligence in the management of the plaintiff's property.

Finding of the Court:

The Court held that the State Management Act was a valid legislation and that the notifications issued under Section 3(1) of the Act were not in contravention of the provisions of the Act. However, the Court found that the Manager had been guilty of wilful default and gross negligence in the management of the plaintiff's property, resulting in heavy pecuniary loss to the plaintiff. The Court also held that the State was vicariously liable for the acts of the Manager and was liable to pay damages to the plaintiff.

Issues: 1. Whether the State Management Act was a valid legislation? 2. Whether the notifications issued under Section 3(1) of the Act were in contravention of the provisions of the Act? 3. Whether the Manager had been guilty of wilful default or negligence in the management of the plaintiff's property? 4. Whether the State was vicariously liable for the acts of the Manager?

Ratio Decidendi: 1. The State Management Act was a valid legislation as it was within the legislative competence of the Bihar Legislature at the time of its enactment in 1949 and was not hit by the restrictive provision of Section 299 of the Government of India Act, 1935, or inconsistent with Article 31(2) of the Constitution of India. It also did not violate the guarantee under Article 19(1)(f) of the Constitution. 2. The notifications issued under Section 3(1) of the Act were not in contravention of the provisions of the Act as the Act empowered the State Government to notify and take over the fractional shares of the plaintiff in the two Mahals in question. 3. The Manager had been guilty of wilful default and gross negligence in the management of the plaintiff's property as he failed to take appropriate measures for preparing or compiling a set of separate Jamabandis in respect of the notified shares, which resulted in a complete standstill in the management of the estates and tenures in question. He also failed to take necessary steps for realising the arrears of rents and profits and to ensure that no part of them became time-barred. 4. The State was vicariously liable for the acts of the Manager as the acts of the Manager were done in the course of his employment and within the scope of his authority.

Final Decision: The appeal filed by the defendants was dismissed with modification in the matter of costs of management. The cross-objection filed by the plaintiff was also dismissed. There was no order for costs in the High Court.