Patna High Court
Darab Kuar vs State Of Bihar And Ors. on 3 July, 1962
Equivalent citations: AIR1962PAT485, AIR 1962 PATNA 485
JUDGMENT Mahapatra, J.
1. The present appellant is the widow of the original plaintiff. She was substituted on the death of her husband while the appeal was pending in this Court. Her husband brought a suit for recovery of Rs. 48,507/- as damages against the State of Bihar and the Union of India representing the North Eastern Railway. He asked for a permanent injunction against those defendants and the members of the District Board of Saran, who were impleaded as defendant No. 3 through the Chairman of that Board, restraining them from claiming any amount from the plaintiff on account of rent due from him.
His allegations were that the right to collect toll from the people who would pass on the footpath on the railway bridge over the river Gandak known as Sonepur-Hajipur-Gandak bridge and from the people who would cross the two public ferries on the northern and southern side of the railway bridge known by the names Pathra-Sewaich and Sabbalpur Konhara ferries, was leased to the plaintiff for a period of three years from the 1st of April 1949 to the 31st of March, 1952 on an annual rental of Rs. 33,700. A public auction for that purpose was held by the District Magistrate of Muzaffarpur on the 17th of February 1949, for which, a notice dated the 4th of December 1948 inviting bidders for settlement of the two ferries and the foot-path had been given before. The settlement with the plaintiff was approved by the Divisional Commissioner and that was communicated to the plaintiff by a letter dated the 9th of March 1949. Apart from the security deposited before the bid at the auction, he deposited in the treasury Rs. 8,435 as rent for the first quarter of the first year of the lease on the 23rd of April 1949.
He also filed the requisite stamp before the District Magistrate on the 31st March 1949, for the purpose of executing a kabuliat in respect of the said lease; but that could not be executed as a condition for repair of the bridge which was not in the auction notice, was sought to be imposed on the lessee, to which he was not agreeable. After the plaintiff had made elaborate arrangements for realisation of tolls by engaging employees, boatmen and by arranging sufficient number of boats, he was informed by the District Magistrate that the foot-path on the railway bridge would remain free to the public and the lessee would not have the right to collect any toll from any of them with effect from the 3rd November 1949. According to the plaintiff, the footpath was the main and attractive source of income in the lease, and, but for that, he would not have agreed to take the lease of the two ferries. As he found that after the release of the foot-path, he was unable to meet his cost of establishment, he surrendered the lease of the two ferries also, on the 31st of August 1950, which was accepted by the District Magistrate; but, in spite of that, the defendants demanded from the lessee rent on account of the lease.
He claimed in the suit that the anticipated profit from the lease of the foot-path on the railway bridge was not less than Rs. 15,000/- a year, and, as such, he asked for a decree of Rs. 45,000/-on that score, on the ground that the lease was terminated to the detriment of the lessee, without any fault on his part. He also claimed Rs. 2507-6-0, as damages for loss sustained on account of the elaborate arrangements made by him for collection of tolls on the railway bridge.
2. The suit was resisted by the three defendants, who filed separate written statements. It was admitted by the State of Bihar and the District Board of Saran that the two public ferries and the foot-path on the railway bridge were jointly settled with the plaintiff, who was the highest bidder, for three years, for Rs. 33,700/- annually; but, they contended that as no kabuliyat was executed by the lessee, he was not legally entitled to sue on the lease. They, however, justified their demand for rent from the plaintiff under the lease and admitted to have written a letter for the purpose on the 20th of March 1952. The first defendant (State of Bihar) stated in their written statement that the plaintiff was allowed a remission of Rs. 15,617/- in the rent, after enquiries about the loss sustained by him, on account of the release of the foot-path on the bridge. But he did not take advantage of that leniency or paid the balance. The Union of India, in their written statement, repudiated the lease, as, the plaintiff failed to execute the necessary kabuliat and to deposit one year's rent forthwith, on settlement.
3. On these pleadings, the trial Court framed eight issues, of which, the first was about the maintainability of the suit. The objection was that, as the contract of lease was not expressed or executed, as provided for in Section 175 of the Government of India Act, 1935, the plaintiff could not lay any suit on the basis of the same. Though the trial Court held in favour of the plaintiff about the settlement of the ferries and the footpath and the release of the latter during the period of the lease, it dismissed the plaintiff's suit as not maintainable. The present appeal is directed against that.
4. That the plaintiff's bid at the public auction was the highest which was accepted by the District Magistrate and later approved by the Division Commissioner, that he was put in possession of the lease property for collection of tolls, and that he deposited Rs. 8,656-4-0 as security money and later, Rs. 8,435 as rent for the first quarter of the first year, are admitted. Non-execution of the kabuliat and non-payment of full one year's rent are also admitted by the plaintiff, but, the ground for the first failure was the insistence of the District Magistrate to impose the obligation of the repairs of the railway bridge on the lessee. The second failure, though a breach of a condition in the auction notice, was not used for the termination of the lease by the defendants and has no bearing upon the present case. The trial court does not appear to have been right in thinking that these two failures on the part of the plaintiff disentitled him to maintain the action.
5. The main question, however, is whether the present suit was hit by the provisions of Section 175 of the Government of India Act, 1935, and, as such, was not maintainable. The appellant disputed this bar and contended that the provisions of the above section are not applicable to the present case, inasmuch as, the lease in question was in respect of public ferries, which are governed by the Bengal Ferries Act, 1885 and the rules made thereunder. The notification for the public auction of the ferries was published on the 8th of January, 1949, vide Ext. 1 (c). In that notification, there was a reference to Section 9 of the Bengal Ferries Act I of 1885, and it was said that "the Pathra-Sewaich and Konhara-Sabalpur ferries between the district of Saran and Muzaffarpur and the foot-path of the Railway between Hajipur and Sonepur will be jointly settled under Section 9 of the Bengal Ferries Act I of 1885 on 17-2-1949 at 12 noon by the District Magistrate of Muzaffarpur in his court room by public auction."
Section 9 of the Act is as follows :
"The tolls of any public ferry may, from time to time, be leased by public auction for such term as the Magistrate of the District in which such ferry is situated may, with the approval of the Commissioner, Direct."
"Ferry" has been defined as 'Ferry includes a bridge of boats, pontoon or rafts, a swing-bridge, a flying-bridge, a temporary bridge and a landing stage.' Under Section 6 it is provided that :
"It shall be lawful for the Lieutenant Governor from time to time to--
(a) declare what ferries shall be deemed public ferries, and the respective districts in which, for the purposes of this Act, they shall be deemed to be situate." ..................
Thus the foot-path on the railway bridge, referred to in the notice for public auction (Ext. 1(C) ) cannot come within the definition of 'ferry', much less, public ferry. The settlement of that foot-path could not be governed by the Bengal Ferries Act, although, it was included in the notice. The pleadings in the case disclosed that, though the railway bridge belongs to the Union Government and the foot-paths thereon were being settled by them before, in the relevant year, it was entrusted to the District Magistrate to settle it That was a power, delegated to the District Magistrate but not a power, vested in him under the Bengal Ferries Act. The plaintiff impleaded the Union Government and stated in paragraph 3 of the plaint :
"That the railway bridge is the property of the Central Government i.e. Union of India formerly representing Oudh and Tirhut Railway and now known as the North-Eastern Railway under the Regrouping Scheme of the Railways. The right to collect toll with respect to the said footpaths over the bridge was put in charge of defendant No. 1 (the State of Bihar) by defendant No. 2 (the Union of India), as a result of which at all material times, defendant No. 1 has been making settlements with respect to the said toll through its officer, viz. the District Magistrate of Muzaffarpur."
From all this, it is clear that the contention of learned Counsel for the appellant that the settlement of the foot-path was under the Bengal Ferries Act and would not attract the provisions under Section 175 of the Government of India Act, 1935, cannot be sustained.
6. Next, it was urged that the settlement of the foot-path on the railway bridge was an appendage to the public ferries, which were the main subject of the lease. The District Magistrate might have clubbed all the three (two ferries and the foot-path) at the time of the settlement, since, he had the power to settle all the three, the ferries under the Ferries Act and the Foot-path under the delegated authority from the Union Government, with view to attracting competitive bids at the public auction. That was an administrative mechanism- Ext. C, the deed of lease of the two ferries in 1944, discloses that they were settled for Rs. 18,300 annually. The suit lease was for Rs. 33,700 per year. No doubt, the foot-path was a great incentive for the lessee; but, that would not alter the position in any way, as far as the settlement of the foot-path is concerned. In view of the admitted position, as revealed in the plaint, the foot-path, being the property of the Union Government, can only be leased by a contract, the execution and expression of which was provided under Section 175 of the Government of India Act, 1935. A similar provision, after 1950, is found under Article 299 of the Constitution. Clause (3) of that section was as follows :
"Subject to the provisions of this Act with respect to Federal Railway Authority, all contracts made in the exercise of the executive authority of the Federation or of a Province shall be expressed to be made by the Governor General, or by the Governor of the Province, as the case may be, and all such contracts and all assurances of property made in the exercise of that authority shall be executed on behalf of the Governor General or Governor by such persons and in such manner as he may direct or authorise."
The lease, in question, in respect of the footpath, was not in conformity with this provision. Neither it was expressed to have been made by the Governor General, nor was it executed on his behalf by such person and in such manner as he may have directed or authorised. No doubt, the allegation in paragraph 3 of the plaint, which I have quoted earlier, that the settlement of the footpath was given by the Union Government to the charge of the State of Bihar, and the latter was managing it through the District Magistrate, Mazaffarpur, was not disputed in the written statement of the defendant No. 2; but that is not sufficient to establish that the Governor General had empowered under Section 175 of the Government of India Act, 1935, the State of Bihar to act in this respect through the District Magistrate. The executive part of the settlement, such as the auction, might have been left to the District Magistrate, by an administrative arrangement, but, that would not empower the District Magistrate to enter into the contract and execute the same in the name of the Governor General, unless there was specific authority for the purpose, as envisaged by Section 175.
The prescribed kabuliat, which the lessee was to execute in pursuance of Section 9 of the Bengal Ferries Act, is given in the Bihar Ferries Manual. It does not mention the name of the Governor General as the lessor. It was contended for the appellant that the contract of lease is embodied in the auction notice, in which all the terms of the lease are incorporated. The moment a person comes to bid at the auction, in response to that notice, he accepts the same and on his part, he is required to execute the kabuliat. In the present case, the plaintiff had submitted the stamp paper to the District Magistrate for executing the kabuliat, but it was postponed as a term, beyond the contents of the auction notice, was sought to be included in the kabuliat, to which the plaintiff, rightly enough, did not agree. The argument does not help the appellant, as the notice does not show that the lease was going to be made on behalf of the Governor General. Section 175 specifically requires that the contract made shall be expressed to be made by the Governor General. Thus there has been a failure to comply with the provisions of Section 175, in so far as, the lease of the foot-path on the railway bridge was concerned. The plaintiff cannot sue for any relief in that respect, as it was not an enforceable contract. Failure to comply with the requirements of that section or Article 299 of the Constitution came for consideration by this Court as well as the Supreme Court on more than one occasion, and it was held that the provision is mandatory, and any contract in conflict with that will not give any cause of action to either party in Court.
7. Learned Counsel next urged that though the contract of lease of the foot-path was not executed and expressed in the manner provided under Section 175 of the Government of India Act, 1935, yet, the principles of Section 70 of the Indian Contract Act will attract the obligation upon the defendant No. 2 to compensate the plaintiff, in respect of the thing done by him for the defendant. In his support, he relied upon the case of State of West Bengal v. B.K. Mondal, AIR 1962 SC 779, where their Lordships observed :
"All that Section 70 provides is that if the goods delivered are accepted or the work done is voluntarily enjoyed then the liability to pay compensation for the enjoyment of the said goods or the acceptance of the said work arises. Thus, where a claim for compensation is made by one person against another under Section 79, it is not on the basis of any subsisting contract between the parties, it is on the basis of the fart, that something was done by the party for another and the said work so done has been voluntarily accepted by the other party. That broadly stated is the effect of the conditions prescribed by Section 70."
At another place they observed :
"In regard to the claim made against the Government of a State under Section 70 it may be that in many cases the work done or the goods delivered are the result of a request made by some officer or other on behalf of the said Government. In such a case, the request may be ineffective or invalid for the reason that the officer making the request was not authorised under Section 175 (3), or, if the said officer was authorised to make the said request the request becomes inoperative because it was not followed up by a contract executed in the manner prescribed by Section 175 (3). In either case the thing has been delivered or the work has been done without a contract and that brings in Section 70. A request is thus not an element of Section 70 at all though the existence of an invalid request may not make Section 70 inapplicable. An invalid request is in law no request at all, and so the conduct of the parties has to be judged on the basis that there was no subsisting contract between them at the material time."
It is clear from what I have quoted above that something must be done for or given to the Government, there being no enforceable or subsisting contract for the same, before a person, so doing or giving, can claim compensation, on the principles contained in Section 70 of the Contract Act. In the present case the plaintiff did not door give anything which was accepted by the Union Government. On the other hand, he collected tolls for about seven months which he appropriated. Besides, what he claims in the suit is not the value of the thing done or given but the future profit which he would have derived, if the collection of toll was left to him for the entire lease period. In no view, either the principles of Section 70 of the Indian Contract Act or that laid down in the above reported decision can be availed of by the plaintiff in this case. The suit claim, was not in respect of the lease of the ferries. It included, however, Rs. 2,507-6-0 for loss in making elaborate arrangement by engagement of men, boats, servants in running of the business (see paragraph 17 of the plaint). It is not clear if this arrangement was for collection of tolls for the ferries at all.
In the background of the case and on reading the plaint I am of the view that what the plaintiff claimed, as damages for loss on account of his arrangements, was in regard to the collection of tolls for the foot-path on the railway bridge. He surrendered the lease of the ferries at the end of August 1950, about 10 months after the foot-path was released from the lease. He decided that course and there could not have been any elaborate arrangement left for the collection of tolls for the ferries before he decided to surrender that lease. Thus, the suit claim was in connection with the lease of the foot-path on the railway bridge which will hot be enforceable in view of what I have already observed with reference to Section 175 of the Government of India Act, 1935, and Section 70 of the Indian Contract Act.
8. The next to be considered is the prayer of the plaintiff for a permanent injunction against the defendants restraining them from making any demand of rent in respect of the lease. Defendants 1 and 3, the State of Bihar and the District Board, Saran, justified their demand for rent from the plaintiff. Such demand was made by a letter dated the 20th of March, 1952, which is not on the record but is admitted to have been issued by the defendant No. 1. If this demand related to the rent in respect of the lease for the foot-path on the railway bridge, certainly it could not be sustained, as neither the defendant No. 1 nor any other defendant could enforce the contract for the same reasons as the plaintiff could not do so. It is not clear what was the amount of demand of the defendants. The plaint and the evidence are silent about it. The plaintiff paid Rs. 8,435/- as rent of the first quarter on the 23rd April, 1949, besides Rs. 8,656-4-0 which he deposited as security money at the time of the auction. That was to be adjusted towards rent also. Thus a little more than half the annual rent was paid by the lessee, who collected tolls for the ferries and the foot-path for seven months. After that he continued the ferries till the end of August 1950. What was the rent due on account of the ferries cannot be ascertained as it was not split up at the time of the auction.
Parties do not appear to have agreed upon any apportionment of rent. In that view, the defendants cannot lay any claim for any definite sum as payable by the plaintiff. He, undoubtedly, was led to give a high bid in anticipation of large profits from collection of tolls from the pedestrians on the foot-path on the railway bridge. For no fault of his, those expectations were cut short by the action of the defendants. In consideration of all the circumstances, I think that the plaintiff shall be entitled to an injunction restraining the defendants from making any demand for any rent from him. We have not been shown if the defendants suffered any loss on account of the surrender of the lease of the ferries by the plaintiff when they settled the same with some other person after August 1950.
9. It is not necessary to determine the quantum of damage which the plaintiff would have, been entitled, if the suit was maintainable. If I were, however, to record any finding in that respect, I would uphold the plaintiff's claim of Rs. 45,000/-, (at the rate of Rs. 15,000/- per year) less by Rs. 10,840/- which admittedly was earned by the lessee during the first seven months of the lease from the tolls of the foot-path. The defendant No. 1 had caused two enquiries about the plaintiff's claim for compensation by two executive officers, Mr. Faruqui and Mr. Rajkishore Prasad. The latter's report is Ext. A dated the 2nd February, 1950, Ext. 8 (a) is an abstract of the account that had been filed before Mr. Rajkishore Prasad and it corroborates the finding of the enquiring officer. The trial Court appears to have misconceived the evidence of P. W. 1. The witness stated that he had some account Bahis with him which would show the account of tickets. That means how many tickets were received and how many were sold and also what arrangements were made during the Sonepur fair and the expenses incurred on that account.
He did not state that the entire income and the profits from the collection of tolls were in that book. The trial court wrongly thought that the book with the witness would have revealed everything, and non-production of the same would raise an inference against the plaintiff. In view of the admission of D. W. 2 and the statements made in Ext. A, report of Mr. Rajkishore Prasad, Sub-deputy Collector and also the evidence of Mr. Faruqui (D. W. 1), there cannot be any doubt that the plaintiff had made a profit of more than Rs. 10,000/-during the first seven months, and that the daily-collection from the foot-path was to be much more during the Sonepur fair before which the foot-path was released from the lease. As for the claim of Rs. 2,507 on account of the loss sustained in making arrangements immediately before the Sonepur fair, Ext. 8 (a), statement of income and expenditure, bears that out. The Sonepur fair attracts; a large number of people, most of whom pass over railway bridge.
It must have been necessary for the plaintiff to make elaborate arrangements for collection of tolls during that time. Had he known that the-foot-path would be released before the Purnamasi, the most important day of the Sonepur fair, he would not have indulged in the expenses. I do not see any reason why the oral evidence supported by Ext. 8 (a) should not be accepted. But as I have stated before, in view of my finding that the plaintiff's suit for damages in respect of the lease of the foot-path on the railway bridge was not maintainable, the quantum of damage is of no significance.
10. The result is that the plaintiff's suit, except for the permanent injunction restraining the defendants from making any demand for rent from him, will have to be dismissed. To this extent, the judgment and decree passed by the trial court will be modified. In view of the circumstances of the case in which the plaintiff was led to bid at the auction for settlement of the ferries and the foot-path at one and the same time and the termination of the more profitable part of the lease by the defendants soon after its commencement, I would direct that the parties will bear their own costs throughout. The appeal is allowed in part.
Tarkeshwar Nath, J.
11. I agree.