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HIGH COURT OF CALCUTTA
B. C. Mitra, S. C. Deb
UNION OF INDIA (UOI) - Appellant
Versus
KAMAL KUMAR GOSWAMI - Respondent
Appeal 95 Of 1969
Decided On : MAY 22, 1973
INDIAN CONTRACT ACT, 1872 - SECTION 70 - AGENCY - JURISDICTION - LIMITATION ACT, 1908 - ARTICLE 120 - LETTERS PATENT, CLAUSE 12 - LEAVE TO SUE - GOVERNMENT OF INDIA ACT, 1935 - SECTION 175(3) - COSTS - FULL COSTS - HALF COSTS - CROSS-OBJECTION - ORDER 1, RULE 8 OF THE CODE OF CIVIL PROCEDURE - REPRESENTATIVE CAPACITY.
Fact of the Case:
The appellant, the Union of India, appealed against a decree passed in favor of the respondent, Mr. Goswami, for the payment of compensation for work done by him under a contract with the Indian Tea Association (the Association). The Association acted as the agents of the Government of India in connection with the construction of an aerodrome during World War II. The appellant denied the agency, pleaded that the claim was barred by limitation, and contended that the Court had no jurisdiction to try the suit. The respondents 2 and 3, members of the Association, filed cross-objections claiming full costs of the suit.
Finding of the Court:
The Court held that the Association acted as the agents of the Government of India, that the claim was not barred by limitation, and that the Court had jurisdiction to try the suit. The Court also held that the appellant was liable to pay compensation to Mr. Goswami under Section 70 of the Indian Contract Act, 1872, and that the respondents 2 and 3 were entitled to half costs of the suit from Mr. Goswami.
Issues: 1. Whether the Association acted as the agents of the Government of India? 2. Whether the claim was barred by limitation? 3. Whether the Court had jurisdiction to try the suit? 4. Whether the appellant was liable to pay compensation to Mr. Goswami under Section 70 of the Indian Contract Act, 1872? 5. Whether the respondents 2 and 3 were entitled to full costs of the suit?
Ratio Decidendi: 1. The Court found that the Association acted as the agents of the Government of India based on the following evidence: - Letters and documents exhibited in the suit. - The Association's account with the Imperial Bank of India, which was operated by the Association and replenished by the Government of India. - The Association's monthly statements of account to the Government of India, which were accepted as correct. - The admission of the Government of India through Mr. S. N. Russell, Joint Secretary to the War Department, that the Association had acted as the agents of the Government of India on an honorary basis. 2. The Court held that the claim was not barred by limitation as it was governed by Article 120 of the Limitation Act, 1908, which has a period of six years, and the suit was filed within that period. 3. The Court held that it had jurisdiction to try the suit as leave under Clause 12 of the Letters Patent was granted, and the Government of India carried on business within the jurisdiction of the Court at the time of the institution of the suit. 4. The Court held that the appellant was liable to pay compensation to Mr. Goswami under Section 70 of the Indian Contract Act, 1872, as the Association had received the benefit of the work done by Mr. Goswami and had not paid him for it. 5. The Court held that the respondents 2 and 3 were entitled to half costs of the suit from Mr. Goswami as he had not obtained leave under Order 1, Rule 8 of the Code of Civil Procedure to sue them in their representative capacity, which resulted in them being personally liable for the costs of the suit.
Final Decision: The appeal was dismissed with costs. The cross-objection was allowed, and Mr. Goswami was directed to pay the other half costs of the suit to the respondents 2 and 3.
( 1 ) THIS appeal is directed against the decree for Rs. 1,44. 549. 87 passed in Suit No. 2566 of 1947 of this Court. The Trial Court directed the appellant, who was the third defendant, to pay the full costs of the suit to the respondent Mr. Goswami who brought that action and half cost to the respondents 2 and 3 who were the other defendants in the Court below.
( 2 ) THE Indian Tea Association is an incorporated association of members. The respondents 2 and 3 are the members of this Association. Mr. Goswami used to act as a contractor under the Association.
( 3 ) ON September 3, 1947. Mr. Goswami filed the above suit against the Dominion of India and the other respondents on these averments made in ihe plaint. In 1944. the Association appointed him as a contractor to do excavation and earthwork for an aerodrome including the construction of drains in connection with Project known as Misamary Project in Assam. The Association agreed to pay him for those works at the rate which he was getting from the Association in connection with the work done by him at Derpoan in Assam. In January 1944 he commenced the said work and completed it in July 1944. The Association have refused to pay him the balance sum of Rs. 1,97,715-6-9 pics inclusive of interests for those works done by him.
( 4 ) MR. Gossami claimed the above sum on the basis of a contract between him and the Association and alternatively under Section 70 of the Indian Contract Act. He added the Dominion of India as a defendant on the allegation that before filing the suit he came to know that the Assocation was alleging that the Association had acted as the agents of (he Government of India and if the Court found that fact to be true he would claim the above sum from the Dominion of India. He served notice under Section 80 of the Code of Civil Procedure on the Dominion of India and then filed the suit.
( 5 ) THE respondents 2 and 3, in their written statement, denied the contract pleaded by Mr. Goswami including their liability by pleading that the Association had acted as the agents of the Government of India as stated in the plaint. The Dominion of India, however, denied that fact and, inter alia, pleaded: "the plaintiff's alleged cause of action, if any, against this defendant is barred by the provision of Section 175 of the Government of India Act 1935". The appellant was substituted in place of the Dominion of India after the Constitution came into force and contested the suit.
( 6 ) THE trial Court held that there was no contract between Mr. Goswami and the Association as pleaded in the plaint. The learned Judge found that the Association acted as the agents of the Government of India. He also found that Mr. Goswami lawfully did the said work not intending to do so gratuitously and the Government of India had enjoyed the benefit of the said Work.
( 7 ) IN these circumstances the aforesaid decree was passed against the appellant and the suit was dismissed against the respondents Nos. 2 and 3. Hence, this appeal is directed against that decree and the judgment of the trial Court and the respondents 2 and 3 have filed cros-objcction claiming full costs of this suit.
( 8 ) IT is not necessary for us to go into the issues framed by the trial Court for the Counsel Mr. H. M. Dhar, appearing for the appellant, confined his contentions only to the following points:1) The Association did not act as the agents of the appellant; (2) The plaint does not disclose any cause of action against the appellant under Section 70 of the Indian Contract Act; (3) The appellant did not enjoy any benefit of the said work done by Mr. Goswami; (4) Mr. Goswami has firled to prove the compensation claimed by him under Section 70 of the Contract Act; (5) The claim of Mr. Goswami is barred by the law of limitation: (6) This Court has no jurisdiction to try this suit; and (7) The appellant, in any event, is not liable to pay half costs of the suit to those two respondents. Mr. Goswami
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