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HIGH COURT OF CALCUTTA
K. C. Das Gupta, H. K. Bose
NEW CHURULIA COAL CO. LTD. - Appellant
Versus
UNION OF INDIA (UOI) - Respondent
A. F. O. D. 65 Of 1956
Decided On : APRIL 23, 1959
CONTRACT - VOID AGREEMENT - RESTITUTION OF ADVANTAGE - AMENDMENT OF PLAINT - NOTICE UNDER SECTION 80 OF THE CODE OF CIVIL PROCEDURE, 1908 - Held, the mere fact that a claim under Section 65 of the Indian Contract Act on the basis that the contract had been discovered to be void, was not made by the plaintiff in his plaint, is not by itself a sufficient reason why he should not be allowed to raise that point. Where further facts require to be investigated, it would be reasonable to proceed by way of an amendment of the plaint to add such arguments. Where, however, further investigation of facts is not necessary, the Court would be justified in giving the plaintiff relief under the provisions of Section 65 of the Indian Contract Act even without a formal amendment of the plaint. The effect of Section 80 of the Code of Civil Procedure, 1908, is that no suit can be instituted for any relief against inter alia the Union of India until a notice with a full statement of the cause of action on which the claim is based has been given at least two months before the institution.
Fact of the Case:
The plaintiff, a company, placed an order with the Assistant Coal Commissioner for the purchase of a second-hand Lancashire boiler. The agreement for sale was entered into in January 1946 between the Assistant Coal Commissioner as the authorised representative of the Government of India and the plaintiff company represented by its Managing Agents. The boiler was delivered to the plaintiff in May 1946. However, the boiler was found to be defective and the plaintiff rejected the boiler and called upon the respondent to take back the boiler and to refund the price. Correspondence on the subject passed between the parties during the period 1946 to 1949 but as the respondent failed and neglected to take back the boiler or to refund the price the plaintiff company on 8-9-1949 served notice under Section 80 of the Code of Civil Procedure and five months thereafter, on 9-2-1950, instituted the suit out of which this appeal arises, for recovery of the price and certain other charges mentioned in the plaint, amounting to Rs. 35,509/12/- and in the alternative for an enquiry into damages.
Finding of the Court:
The Court held that the agreement is void and unenforceable inasmuch as it is not in the form prescribed by Section 175 (3) of the Government of India Act, 1935. The Court also held that in the absence of specific pleading of a case under Section 65, such an issue should not be allowed to be raised especially in view of the fact that the issue involves a trial of at least two questions of fact, namely, (1) the time when the agreement was discovered to be void and (2) what are the advantage. 3 which party has received and which it must restore or for which it must pay compensation. The Court further held that Section 80 of the Code of Civil Procedure, 1908 furnishes an additional obstacle to such an issue being allowed to be raised.
Issues: 1. Whether the contract pleaded in paragraph 1 of the plaint is enforceable in view of the provisions of Section 175 (3) of the Government of India Act, 1935? 2. Is the plaintiff entitled to recover the amount claimed in the plaint under the provisions of Section 65 of the Indian Contract Act?
Ratio Decidendi: 1. The Court held that the agreement is void and unenforceable inasmuch as it is not in the form prescribed by Section 175 (3) of the Government of India Act, 1935. 2. The Court held that in the absence of specific pleading of a case under Section 65, such an issue should not be allowed to be raised especially in view of the fact that the issue involves a trial of at least two questions of fact, namely, (1) the time when the agreement was discovered to be void and (2) what are the advantage. 3 which party has received and which it must restore or for which it must pay compensation. 3. The Court further held that Section 80 of the Code of Civil Procedure, 1908 furnishes an additional obstacle to such an issue being allowed to be raised.
Final Decision: The Court dismissed the appeal with costs.
( 1 ) THE main question for decision in this appeal is whether the plaintiff, who is the appellant before us, should be allowed to raise an issue as regards relief under Section 65 of the Indian Contract Act though the suit as framed was for recovery of a sum of money on the basis of a contract and on an allegation of failure of consideration for the contract. It appears that the plaintiff being in need of a Lancashire Boiler registered its requirement with the Department of Government which had been helping parties in India to obtain such boilers from abroad. By a letter dated 31st of January 1946 addressed to the Assistant Coal Commissioner of the Department of Industries and Supplies. Government of India, the plaintiff requested allocation of 2 Lancashire Boilers including one "by John Thompson with a working pressure of 150 lbs. per sq. inch complete with fittings, mountings and firebars". On 19th February 1946 the Assistant Coal Commissioner wrote that one second-hand Lancashire Boiler had been allocated to the plaintiff for installation at the Churulia Colliery. It appears further that after the plaintiff had sent a cheque for Rs. 34,000/-on account of the price of the Boiler as intimated by the Assistant Coal Commissioner, the necessary documents including the railway receipt as regards the Boiler were sent to the plaintiff and the plaintiff took delivery of the Boiler in May 1946. The plaintiff's case as made in the plaint is that when received this Boiler was found to be in unserviceable condition and in spite of the repairs which were carried out in accordance with the suggestion of the Assistant Coal Commissioner, the Boiler was still unfit for the purpose for which it had been purchased and could attain only working pressure of 109 lbs. instead of the pressure of 150 lbs. as required. As early as February 1947 the plaintiff on finding that the Boiler was unserviceable asked the Assistant Coal Commissioner to take back the Boiler and to refund the price as also the freight and handling charges. This request was repeated in several letters and ultimately by a letter dated 5th July 1949 the plaintiff wrote rejecting the Boiler and again calling upon the Assistant Coal Commissioner to take back the Boiler and to refund the price together with the amount paid by the plaintiff on repairs of the same. As the defendant did not take back the Boiler or refund the price, the plaintiff brought the present suit for recovery of the sum of Rs. 35,509-12-0 consisting of Rs. 34,000/-paid on account of price, Rs. 364-11-0 for the railway freight, Rs. 325-1-0 for the handling and unloading charges and Rs. 820/- spent on account of repairs. The main defence raised in the written statement was that the contract was void inasmuch as it did not comply with the provisions of Section 175, Sub-section (3) of the Government of India Act. 1935, At the tried the. first issue raised was "whether the contract pleaded in paragraph 1 of the plaint was enforceable in view of the provisions of Section 175 (3) of the Government of India Act". The learned Judge has held on the authorities of numerous decisions of this Court that the agreement was void. That conclusion is no longer disputed before us and in fact, Mr. Roy, the learned counsel for the appellant, formally submitted to us that his client abandoned the claim on the basis of the contract.
( 2 ) AT the trial Mr. Roy asked the Court's permission to raise a second issue as to whether the plaintiff was entitled to recover the amount claimed in the plaint under the provisions of Section 65 of the Indian Contract Act, that is, for restitution of the sum of Rs. 64,000/- which was the advantage obtained by the defendant, the Union of India, under the agreement which has been discovered to be void. The learned Judge allowed some evidence to be adduced on the fact and the date of discovery that the agreement was void but ultimately came to the conclusion that the plaintiff can
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