The general law applies to agreements made by Municipalities in the absence of specific provisions in the Municipalities Act, and compensation can be claimed under Section 65 of the Contract Act.

Jackson, J.

1. The plaintiffs are wholesale rice merchants of Sattur, who agreed during the period of scarcity after the war of 1914-1918 to supply rice bags to Srivilliputtur Municipality, which a committee duly appointed by the Municipality was to retail to private persons. After a consignment of bags had been made in February 1920, the price fell and the Municipality disposed of them at a loss and refused to pay the plaintiffs more than what it got by the sale. The plaintiffs claim Rs. 3,000 as the value of the bags as upon the date of delivery. The District Munsif and the Subordinate Judge decreed the suit except for a reduction made on account of gunny bags. This Court dismissed the suit on second appeal. Hence this Letters Patent appeal.

2. The plaintiffs cannot sue upon contract because they have no written contract signed by two councillors as provided by Section 45 of the then Act, Act 4 of 1884. They claim however under Section 65, Contract Act, that the agreement having been discovered to be unenforceable in law on this account they are still entitled to compensation in proportion to the advantage received by the Municipality. This claim was originally met by citing Radhakrishna Das v. Municipal Board of Benares (1905) 27 All. 592 which has been followed in Ramaswami Chetty v. Municipal Council Tanjore (1906) 29 Mad. 360 and evidently influenced Walsh, J., in our present case. It was held in Allahabad that Section 65 cannot apply to a contract void ab initio and it was also suggested hypothetically that if a Court were to hold otherwise it would render nugatory the salutary provision of the Municipalities Act which provides that a contract executed otherwise than in conformity with it shall not be binding on the Board. In Gulabchand v. Fulbai (1909) 33 Bom. 411 it was suggested that the scope of Section 65 may be extended to contract void abinitio, and now in the light of Harnath Kumar v. Indar Singh A.I.R. 1922 P.C. 403 that suggestion must be accepted as correct.

3. Now if a Municipality make an agreement which is discovered to be void be cause it is not under the signature of two councillors as provided by Section 45, Madras Act, 4 of 1884, can it be said to go behind the statute or to render its provisions nugatory, if such an agreement is brought within the ambit of Section 65, Contract Act? The short answer to this question would seem to be that the Municipalities Act is silent about and therefore not concerned with such an agreement. The distinction between agreements and contracts is well known and it would have been quite easy to provide that every agreement made on behalf of a Municipal Council shall be immune from the provision of Section 65, Contract Act, but there is nothing of the kind in the Act. The Act only states that in certain circumstances contracts shall be not binding on the council. Sections 45 and 46 are only concerned with contracts. If a council makes a promise it is an agreement; if that agreement is not enforceable by law it is said to be void; and when an agreement is discovered to be void any person who has received any advantage under such agreement is bound to restore it. If it is held that a Municipality is a person who can make agreements, then, if such person is treated under the general law, can it be said that a salutary provision has been defeated?

4. There is nothing salutary in allowing rate-payers to escape their statutory obligation more easily than other persons. The Legislature is considering the welfare of the community as a whole, and there is no cause; for surprise that while making special provision in terms as regards contracts, it left agreements to be governed by the general law. Mr. Srinivasa Ayyangar argues that the special overrides the general; a maxim of universal acceptance, but before its application one must first find that there is a special law. If agreements are not specially mentioned they are under the general law. Probably the idea that to apply S