PETITIONER: KARAMSHI JETHABHAI SOMAYYA Vs. RESPONDENT: THE STATE OF BOMBAY DATE OF JUDGMENT: 03/03/1964 BENCH: SUBBARAO, K. BENCH: SUBBARAO, K. GUPTA, K.C. DAS DAYAL, RAGHUBAR CITATION: 1964 AIR 1714 1964 SCR (6) 984 CITATOR INFO : RF 1980 SC1285 (10) ACT: Agreement-Concluded by Superintending Engineer-If hit by s. 175(3) of Government of India Act-Supply of Irrigation water-Transfer of right-If permission needed-Government of India Act, 1935 (26 Geo. v. Ch. 2), s. 175(3). Bombay Irrigation Act, 1879 (Bom. of 1879), ss. 3(6), 4, 27-30. HEADNOTE: One K had obtained sanction to irrigate certain lands from a canal. The same year the Government proposed to reserve certain area along the canal as factory area. According to the appellant after some correspondence between the Government and K, the Superintending Engineer agreed to exclude K's land from the factory area and also to give water perpetually on the condition that he concentrated all his holding on the tail outlet of the canal and to take the supply of water on volumetric basis. Pursuant to that arrangement, K concentrated his holdings and shifted his operations to that area and he was supplied water on the agreed basis. Later the appellant and K entered into a partnership in respect of exploiting this area. Disputes arose between the appellant and K which culminated in a consent decree whereunder the appellant became the full owner of the land including the right to use this canal water. When the appellant applied for the recognition of the transfer the canal officer refused to do so. On appeal be was informed that his request for supply of the canal water could not be granted. The supply was stopped. After giving them statutory notice under s. 80 of the Code of Civil Procedure, the appellant filed a suit against the State for a declaration of his right to water from the canal and for consequential reliefs. The State contested the suit contending, inter alia, that there was no concluded agreement between the Government and K. that even so, the agreement was void inasmuch as it 'did not comply with the provisions of s. 175(3) of the Government of India Act, 1935 and in any view the appellant could not legally get the benefit of the agreement under s. 30 of the Bombay Irrigation Act. The Civil Judge held that there was a concluded agreement between the Government and K, but the transfer by K of the said right in favour of the appellant was in violation of the provisions of the Bombay Tenancy and Agricultural Lands Act and dismissed the suit. On appeal, the High Court held that there was neither a concluded agreement between K and the Government nor did it comply with the requirements of law, and the appeal was dismissed. On appeal by special leave: Held- (i) The documents in the instant case record a concluded agreement between the Superintendent Engineer, acting on the order of 985 the Minister of Public Works Department, on the one hand and K on the other agreeing to supply water so long as K had cane cultivation in the concentrated area. (ii) The provisions of Bombay Irrigation Act establishes that every person desiring to have supply of water from a canal shall apply in the prescribed manner to the Canal Officer and that person to whom water is supplied cannot transfer his right to another without the permission of the Canal Officer. But if the land in respect whereof the water is supplied is transferred, the agreement for the supply of water also shall be presumed to have been transferred along with it. (iii) The conduct on the part of the Government as well as that on the part of K and the appellant also establishes that the agreement was not under the Bombay Irrigation Act, but between the Government and K. (iv) The agreement is void, as it has not complied with the provisions of s. 175(3) of the Government of India Act. The contract was not either entered into by the person legally authorised by the Government to do so or expressed to be made in the name of Governor. Seth Bikhraj Jaipurja v. Union of India, [1962] 2 S.C.R. 860 and New Marine Coal Co. v. Union of India, [1964] 2 S.C.R. 859, referred to. Union of India v. Rallia Ram, A.I.R. 1963 S.C. 1685, referred to. Semble: While it is the duty of a private party to a litigation to Place all the relevant matters before the court, a higher responsibility rests upon the Government not to withhold such document from the Court. JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 552 of 1962.
Appeal by special leave from the judgment and decree dated
August 22, 1960 of the former Bombay High Court in appeal
No. 432 of 1954 from Original Decree.
M. K. Nambiar, J. B. Dadachanji, O. C. Mathur and
Ravinder Narain, for the appellant.
D. R. Prem, B. R. G. K. Achar and R. H. Dhebar, for the
respondent.
March 3, 1964. The Judgment of the Court was delivered by
SUBBA RAO, J.-This appeal by special leave is directed
against the judgment and decree of the High Court of Bombay
confirming those of the Civil Judge, Senior Division,
986
Ahmednagar, Jr,, Special Civil Suit No. 6 of 1953 filed by
the appellant against the State of Bombay for a declaration
of his right to water from a particular source, and for
consequential reliefs.
The appellant is the owner of Shankar Tukaram Karale Rampur
Farm, situated at the tail-outlet of the Godavari Right Bank
Canal Distributary No. 17, The lands comprised in the said
Farm originally belonged to Shankar Tukaram Karale,
hereinafter called Karale. In the year 1935 the said Karale
had a farm for raising sugarcane consisting of 35 acres
owned by him and about 65 acres of land taken on lease by
him in Ahmednagar District. He obtained sanction to
irrigate his lands on the outlet No. 17 of the Godavari
Right Bank Canal. In or about the same year the Government
of Bombay proposed to reserve certain area along the said
Distributary Canal as “factory area”. After some
correspondence between the said karale and the Government of
Bombay, it was the appellant’s case, the Superintending
Engineer agreed on July 14, 1939, to exclude Karale’s lands
from the factory area and also to give him water perpetually
on condition that he concentrated all his holdings on the
tail outlet of Distributary No. 17 and to take the supply of
water on volumetric basis. Pursuant to that arrangement,
Karale, by purchase or otherwise, concentrated his holdings
and shifted his operations to that area and he was supplied
water on the agreed basis. In or about April 1948, the
appellant and Karale entered into a partnership for
exporting the said area whereunder the appellant had three-
fourths share and the said Karale had one-fourth share.
Later on disputes arose between the appellant and Karale in
respect of the partnership which culminated in a consent
decree dated February 7, 1951, whereunder the appellant
became the full owner of the partnership business with all
its assets and liabilities, including the lands and the
compact block and the right to use the canal water. When
the appellant applied for the recognition of the transfer,
the Canal Officer refused to do so. On appeal, he was
informed that his request for supply of canal water could
not be granted. From April 1952 the supply was stopped.
After giving the statutory notice under
987
s. 80 of the Code of Civil Procedure, the appellant filed
Special Civil Suit No. 6 of 1953 in the Court of the Civil
Judge, Senior Division, Ahmednagar, against the State of
Bombay for a declaration that the plaintiff was entitled to
the supply and use of water from the tail outlet of Distri-
butary No. 17 of the Canal to irrigate 100 acres of basic
cane land in the concentrated area described in Schedule 11
at the rates prescribed by the Government under the
Irrigation Act on a volumetric basis, for specific
performance of the aforesaid agreement between Karale and
the Government, for recovery of damages, and for other
incidental reliefs. The State of Bombay filed a written-
statement contending, inter alia, that there was no
concluded agreement between the Government and Karale
embodying the alleged terms stated in the plaint, that even
if there was such an agreement, it was void inasmuch as it
did not comply with the provisions of s. 175(3) of the
Government of India Act, 1935, and that, in any view, the
appellant could not legally get the benefit of the agreement
under s. 30 of the Bombay Irrigation Act, 1879. On the
pleadings as many as seven issues were framed reflecting the
contentions of the parties. The learned Civil Judge held
that there was a concluded agreement between the Government
and Karale on the, terms alleged by the appellant, but the
transfer by Karale of the said right in favour of the
appellant was in violation of the provisions of the Bombay
Tenancy and Agricultural Lands Act, 1948, and, therefore,
there was no legal transfer of Karale’s right of water in
favour of the appellant. In that view, he dismissed the
suit. On appeal, the High Court held that there was neither
a concluded agreement between Karale and the Government nor
did it comply with the requirements of law. In the result
the appeal was dismissed. Hence the present appeal.
The arguments of Mr. M. K. Nambiar, learned counsel for the
appellant, may be summarized under the following heads : (1)
There was a concluded agreement between Karale and the
statutory authority, the Canal Officer, whereunder the said
Karale was entitled ‘to get water to his compact block
permanently from the tail outlet of Distributary No. 17 of
the Godavari Right Bank Canal so long
988
as he was willing to pay the rates for such supply on volu-
metric basis. (2) As under the compromise decree between
Karale and the appellant the said block of land was trans-
ferred to the appellant, the right under the agreement for
the supply of canal water was also transferred to him under
s. 30 of the Bombay Irrigation Act, 1879 (Bombay Act No. 7
of 1879), hereinafter called the Act. (3) Section 175(3) of
the Government of India Act, 1935, does not apply to the
agreement in question for the following reasons : (i) once
the Legislature covers any matter by the enactment of any
statute, any functional power assigned to the Government or
any other authority under the said statute is exercisable
only under that statute and in virtue of the statutory
authority and not in the exercise of the executive authority
of the Province within the meaning of s. 175(3) of the
Government of India Act, 1935; (ii) the agreement
contemplated by s. 30 of the Act is an agreement entered
into under the Act by a statutory authority in pursuance of
a statutory power with the statutory consequences and,
therefore, such an agreement is outside the provisions of s.
175(3) of the Government of India Act, 1935; and (iii) that
apart, the expression “agreement” in s. 30 of the Act does
not mean a formal contract, but only a sanction, permission
or consent given by the Canal Officer pursuant to the
authority given to him under the Act, and, therefore, such
sanction, permission or consent is not a contract within the
meaning of s. 175(3) of the (Government of India Act, 1935.
This appeal raises a question a far-reaching importance as
regards the scope of the executive authority exercised by
the Governor under the Government of India Act, 1935; but,
we are relieved of the duty to express our opinion on that
question in this appeal in view of our finding that the
agreement in question was arrived at outside the provisions
of the Act and, therefore, it squarely falls within the
scope of s. 175(3) of the Government of India Act, 1935.
We shall at the outset address ourselves to the said
agreement, namely, (i) who are the parties to the said
agreement; and (ii) what are the terms thereof?
989
When the suit was pending decision of the Civil Court, the
appellant filed an application therein for directing the
Government to produce, among others, the applications made
to the Government from time to time by Karale in respect of
supply of water to his farm in the year 1935 and subsequent
thereto and the office copies of the replies sent to the
said applications, the Government documents and papers,
water-bills and the records in respect _of the supply of
water to the land belonging to Karale from the year 1935.
and the correspondence that passed between karale and’ the
Government between 1935 and 1939 in respect of consolidation
of his lands. Obviously these papers were required by the
appellant for establishing the case that there was a
concluded agreement between Karale and the Government or the
Canal-officer. But, unfortunately, the said documents were
not produced. It is not clear from the record why and under
what circumstances the Government withheld the documents
from the court, but in appeal the High Court in its judgment
remarked: “In the trial Court no attempt was made to have
this endorsement produced in Court which could have been
done if the plaintiffs Counsel had so desired by a proper
application to the Court”. But the High Court felt that it
was absolutely necessary in the interests of justice to call
upon the learned Government Pleader to produce the file with
reference to that particular endorsement, namely,
Endorsement No. 3033/36-1 dated 28th April 1939, and
directed him to do so. It disposed of the appeal after
receiving the said relevant document. Though the High Court
threw the blame for this lapse on the appellant, we do not
think there was any justification for it. Apart from the
fact that the appellant asked for the production of all the
relevant documents, the Government, being the defendant in
this case, should have produced the documents relevant to
the question raised. While it is the duty of a private
party to a litigation to place all the relevant matters
before the Court, a higher responsibility rests upon the
Government not to withhold such documents from the court.
Be that at it may, the documents were finally produced
before the court, and the High Court considered the same in
arriving at its conclusion. Though Mr. Nambiar suggested
that the said documents
990
related to some other party, as we will indicate in the
course of the judgment, the said file dealt also with the
agreement alleged to have been entered into between Karale
and the Government.
Exhibits Nos. D-67 and D-68 are the documents on which
strong reliance is placed on behalf of the appellant.
Exhibit D-67 reads thus :
Below Government endorsement No. 3033/36-1 dated the 28th
April 1939:
No. 4223 of 1939
Poona, 14th July, 1939.
Returned with compliments.
2. The applicant has already been allowed
to continue his present cane irrigation of 93
acres on outlets 2 and Tail of Distributary 17
of the Godavari Right Bank Canal for one year
from 15-2-1939 pending consideration of his
case in detail, in relation to the demand of
the Sugar Company formed by Messrs. Jagtap &
Khilari on this canal and lately named the
“Changdeo Sugar Factory”.
3. In view however of the orders issued
verbally by
the Hon’ble Minister, Public Works Department
on 12-7-1939 the applicant is being allowed to
concentrate all his cane irrigation to the
extent of 100 acres on the tail outlet of Dy
17 of the Godavari Right Bank Canal by 15-2-
1940 and to continue it permanently there if
he so wishes provided he agrees to take water
by measurement on volumetric basis of 112″ at
the outlet head and pay the water rates that
may hereafter be sanctioned by Government in
this respect. The applicant has since
signified his willingness to these conditions.
He will be charged, till then on the area
basis as is done at present.
4. The area thus allowed to the applicant
will be excluded from the Sugar Factory area
while
991
fixing the boundaries of the allotted factory area of the
“Changdeo Sugar Factory” on this canal. D.A. Marathi
petition.
(Sd.) W. H. E. GARROD, Superintending Engineer, D.I.C.
Copy, with compliments, to the Executive Engineer, Nasik
Irrigation Division, for information and guidance with
reference to the correspondence ending with this office No.
3686 dated 22-6-1939.
Exhibit D-68 is a letter written by the Superintending
Engineer to Karale. It reads :
No. 4224 of 1939 Poona, 14th July 1939.
TO
Shankar Tukaram Karale, Esquire, at Belapur.
Continuation of cane irrigation on Distributary No. 17 of
the Godavari Right Bank Canal.
Dear Sir,
In continuation of this office No. 3686 dated 23rd June
1939, I have to inform you that under orders of the
Honourable Minister, Public Works Department, you will be
allowed to irrigate came to the extent of 100 acres on the
tail outlet of Distributory No. 17 of the Godavari Right
Bank Canal permanently, so long as you may wish to do so, on
condition that you agree to take canal water by measurement
on volumetric basis of 112″ depth at the outlet head at the
rate which may be sanctioned by Government hereafter.
(2) This will apply to new cane plantation from 15-2-1940
onwards. Till then, you may continue your cane irrigation
on outlets 2 and tail as at present.
Yours faithfully, (Sd.) W. H. E. Garrod,
Superintending Engineer, Deccan Irrigation Circle.
992
Copy, with compliments, to the Executive Engineer, Nasik
Irrigation Division, for information.
A fair reading of these two documents leaves no room for
doubt that a firm agreement was entered into between the
Government and Karale in respect of the supply of water to
his land to the extent of 100 acres on the tail outlet of
Distributary No. 17 of the Godavari Right Bank Canal. These
two letters show that there was previous correspondence
between the Engineering Department and Karale and that the
Minister of Public Works Department intervened and settled
the terms of the agreement, and that the terms were
communicated to Karale, who accepted the same. The terms of
the agreement were, (i) Karale was allowed to concentrate
all his cane irrigation to the extent of 100 acres on the
tail outlet of Distributary No. 17 of the Godavari Right
Bank Canal by February 15, 1940, and to continue it
permanently, if he so wished; (ii) Karale agreed to take
water by measurement on volumetric basis of 112″ at the
outlet head and to pay water rates that might thereafter be
sanctioned by the Government in that respect; (iii) the said
area will be excluded from the sugar factory area while
fixing the boundaries of the allotted sugar factory area of
Changdeo Sugar Factory; and (iv) the terms will apply to new
cane plantation from February 15, 1940 onwards. It is said
that the word “permanently” refers to cultivation, but not
to supply of water. This interpretation makes the entire
contract meaningless. Sugar cultivation can be done only
with the permission of the department, for sugarcane crop
cannot be raised without supply of water from the canal.
When the Superintending Engineer allowed Karale to
concentrate all, his cane irrigation in the said area
permanently on condition he paid the prescribed rates, it
was necessarily implied in the said agreement that he would
supply water permanently, if the said rates were paid.
Cultivation and supply of water are so inextricably connect-
ed that one cannot be separated from the other. The
permission to have cane irrigation permanently on the basis
of a particular rate implies that the supply for irrigation
is co-terminous with irrigation. In this view we must hold
that Exs. D-67 and D-68, read together, record a concluded
993
agreement between the Superintending Engineer, acting on the
orders of the Minister of Public Works Department, on the
one hand and Karale on the other, agreeing to supply water
so long as Karale had cane cultivation in the con- s
centrated area. The other documents, read along with the
documents filed for the first time in the High Court, also
do not detract from this conclusion. Exhibit D-78. which is
not dated, was the application filed by Karale to the Chief
Minister, P.W.D. and Irrigation Department, Bombay. Therein
Karale represented to the Chief Engineer that Distributary
No. 17 was permanently closed prior to 1935, that he was
responsible for starting the said Distributary by commencing
plantation. that the “Prime Minister’s” consent gave him an
assurance that while declaring the factory area, the area of
the previous gardeners would be excluded from the said area,
that he had invested a capital of about Rs. 75,000/- for
raising the plantation and that in the circumstances he
prayed that while declaring the factory area, his land
should be excluded therefrom. This application was
considered by the concerned office under G.L. No. 3033/36
dated April 27, 1939. In the note put up by the office the
contents of the ;said application are summarized.
Thereafter the following note is found :
“With reference to the H.M.R.D.’s note dated
3-4-1939 it may be observed that Government
has already accepted the principle that no
ordinary irrigators should be allowed to
operate in the sugar factory area. Under the
general orders issued on the subject owner
irrigators are to be allowed to continue
irrigation, on yearly basis. It is for
consideration whether this fact may be brought
to the notice of the H.M.R.D. If it is decided
to do so the papers may be submitted to the
H.M., P.W.D. and the H.M.R.D. after the drafts
put up are issued.”
The Revenue Minister accepted the endorsement. This is only
an office note and the suggestion that the irrigators should
be allowed to continue on the yearly basis was only to
prevent further applications after the factory area was
declared. This endorsement had nothing to do with the 134-
159 S.C.-63
994
exclusion of any particular area from the sugar factory
area. The endorsement “should see” below the endorsement
made by the Revenue Minister perhaps meant that the papers,
should be submitted to the Minister concerned. Exhibit D-79
is a letter written by the Deputy Secretary to the
Government of Bombay to Changdeo Sugar Mills. This letter
also refers to the office endorsement No. 3033/36-1. Though
we are not directly concerned with this letter, it may be
mentioned that the application of Karale is connected with
the proposal to declare certain area as factory area and to
give water to Changdeo Sugar Factory in respect of the lands
in that area, for his application was to exclude his area
from the factory area. Both the matters obviously were
dealt together. Exhibit D-79A is again part of the file
relevant to the factory area. But a reference is made again
to the office No. 3033/36-1 and in the same file Karale’s
letter is also noticed. Exhibit D-81 is an endorsement at
page 133 of the same file, which also deals with the
subject’sugar factories”. It contains a copy of the letter
written to the Superintending Engineer requesting him to
submit at a very early date a draft agreement for the supply
of water to the company’s area on the Godavari Right Bank
Canal on the terms embodied in the margin thereof. Exhibit
D-82 is also another endorsement on the same file. The
endorsement reads thus :
Endorsement at 191.
3033/36
1114
Discussed with the Secy.
In addition to his written requests, Mr. Karale had also
interviewed the late H.M.R.D. During the discussions, H.M.
had made it clear that Mr. Karale can only be allowed to
continue if he was willing to consolidate his holdings in an
independent block so that the Co.’s cultivation be carried
on undisturbed.
This is not recorded on this file as H.M. did not pass any
orders in Bombay or at the Secretariat but instructed
995
(Presumably after discussion with Mr. Sule) the S.E.D.I.C.
in the matter.
Please see P. 107 ante. That Mr. Karale’s cane has to be
shifted to one block is clear from the wordings of the
S.E.S. letter. “The applicant is allowed to concentrate all
his cane…….. on the tail outlet of D. 17”. This is the
only record of the orders passed.
Moreover Mr. Karale is to have his supply on a volumetric
basis as soon as that can be arranged for. This would
necessitate the concentration of his cane areas.”
This endorsement notices the contents of Ex. D-67 and,
therefore, it must have been made only after April 28, 1939.
The said documents do not carry the matter further. They
only show what we have already noticed, namely, the Govern-
ment wanted to create a factory area and that Karale filed
an application to have his area excluded therefrom. The
notings of the department are not in any way inconsistent
either with Ex. D-67 or with Ex. D-68. Exhibits D-67 and
D-68 refer to Office No. 3686 dated June 23, 1939, and that
letter must have been in some other file and that file was
not produced and, if produced, it might have thrown some
more light. In the circumstances we must proceed on the
basis that Exhibits D-67 and D-68 embodied the terms of the
agreement entered into between the Government and Karale
pursuant to the application, Ex. D-78, made by him to the
Chief Engineer, P.W.D. We have already held that the said
documents record the completed agreement between the
Government and Karale in respect of supply of water to his
and.
Even so, the question arises whether the said agreement is
enforceable, if it has not complied with the provisions of
s. 175(3) of the Government of India Act, 1935. The
premises on which Mr. Nambiar built his argument is that the
said agreement was entered into between the parties under
the provisions of the Act. If it was not made under the
provisions of the Act, but outside the Act, the foundation
for this argument would disappear. We would, therefore.
proceed to consider now whether the said agreement was under
the provision of the Act.
996
The relevant provisions of the Act may now be read. Section
3(6) defines “Canal-Officer” to mean any officer lawfully
appointed or invested with powers under section 4. Under s.
4, such officer can exercise powers and discharge duties
that may be assigned to him by the State Government. It is
said that the Superintending Engineer was one of the
officers so appointed by the Government and that the powers
under ss. 27 to 30 of the Act were assigned to him. Under
s. 27, “Every person desiring to have a supply of water from
a canal shall submit a written application to that effect to
a Canal-Officer duly empowered to receive such applications,
in such terms as shall from time to time be prescribed by
the State Government in this behalf”. Under s. 29, “When
canal-water is supplied for the irrigation of one or more
crops only the permission to use such water shall be held to
continue only until such crop or crops shall come to
maturity, and to apply only to such crop or crops”. Under
s. 30, “Every agreement for the supply of canal-water to any
land, building or other immovable property shall be
transferable therewith, and shall be presumed to have been
so transferred whenever a transfer of such land, building or
the other immovable property takes place.” But under the
second limb of the section, “except in the case of any such
agreement as aforesaid, no person entitled to use the water
of any canal, shall sell or sub-let, or otherwise transfer,
this right to such use without the permission of a Canal-
Officer duly empowered to grant such permission”. A
combined reading of these provisions establishes that every
person desiring to have supply of water from a canal shall
apply in the prescribed manner to the Canal-Officer and that
the per–,on to whom water is supplied cannot transfer his
right to another without the permission of the Canal-
Officer. But if the land in respect whereof the water is
supplied is transferred, the agreement for the supply of
water also shall be presumed to have been transferred along
with it. The expression “agreement” in s. 30 of the Act, it
is contended, does not connote a contract as understood in
law, but only a convenient mode of expression to indicate
the sanction or permission given by the Canal-Officer. This
meaning of the expression “agreement” is sought to be
supported by a reference to the Bombay Canal Rules, 1934,
made in
997
exercise of the powers conferred on the State Government
under s. 70(e) of the Act. Part 11 of the Rules deals with
supply of water. It provides for the filing of
applications, the manner of their disposal and. the persons
entitled to dispose of the same, and also the mode of supply
of water for cultivation of different crops. The forms
prescribed columns under different heads for giving the
necessary particulars. The forms contain the instructions
as well as conditions on which permission will be granted.
Rule 7 says that an application for supply of water for the
irrigation of land for any period may be sanctioned,
indicating thereby that there is no maximum period fixed for
which application for supply of water can be made. Assuming
without deciding that “agreement” under s. 30 of the Act
means only sanction, the Act and the Rules provide for an
application to be made to the Executive Engineer, who,
subject to. the Rules, can give the sanction. Rule 36
provides for an appeal from the order of the Executive
Engineer to the Superintending Engineer, and from that of
the Executive Engineer’s order under r. 18 or r. 19 to the
Collector. But there is no provision either in the Act or
in the Rules made thereunder enabling any party to make an
application to the Chief Engineer to exclude his land from
factory area, and to give him supply of water for irrigating
the said land permanently, or a power to the Government to
enter into an agreement or make an order in respect of such
an application. Such an order or agreement is entirely
outside the scope of the Act or the Rules made thereunder.
We are not called upon in this case to decide whether the
Government has any such power outside the Act; but, we shall
assume for the purpose of this case that it has such power
and to proceed to consider the legal arguments on that
basis.
The documentary evidence adduced in this case, which we have
already considered, discloses that the application was made
to the Chief Engineer; that the Government, through the
relevant ministry, considered the application and that on
the instructions given by the concerned Minister, the
Superintending Engineer wrote the letter Ex. D-68 to
Karale. It was, therefore, in effect and substance, an
agreement entered into between the Government and Karale.
998
Such an agreement fell outside the provisions of the Act.
The parties to the agreement also understood that it was an
agreement made between the Government and Karale. The
Government in or about February 1942 sent a draft agreement
to Karale for execution regarding the supply of canal water
to his farm, but the said Karale did not execute the
agreement. The parties did not agree in regard to some of
the conditions found in the draft, but Karale did not
contest the position of the Government that a formal agree-
ment in compliance with the provisions of law was necessary.
Again during the continuance of the partnership between
Karale and the appellant, in or about 1950, the Government
of Bombay sent another draft agreement to the said Karale
for execution. Though Karale signed the agreement, he
insisted upon a proviso that the agreement should be without
prejudice to the permission already granted to him. The
Bombay Government did not execute the said agreement. So
too, Karale and the appellant were making yearly
applications under the Act and getting supply of water to
their plantation. That procedure was presumably followed
because, though there was an agreement between Karale and
the Government, for one reason or other, a formal document,
though intended to be executed, was not executed. This
conduct on the part of the Government as well as that on the
part of Karale and the appellant also establishes that the
agreement was not under the Act, but between the Government
of Bombay and Karale. If so, it follows that the contract
entered into between the Government and Karale was a
contract made in the exercise of the executive authority of
the Province within the meaning of s. 175(3) of the
Government of India Act, 1935. The relevant part of s.
175(3) of the Government of India Act, 1935, read :
“All contracts made in the exercise of the
executive authority of a Province shall be
expressed to be made by the Governor of the
Province …… and all such contracts and all
assurances of property made in the exercise of
that authority shall be executed on behalf of
the Governor by such persons and in such
manner as he may direct or authorise.
999
This section laid down two conditions for the validity of
such a contract, namely, (i) it should be expressed to be
made by the Governor of the Province, and (ii) it should be
executed on behalf of the Governor by such persons and in
such manner as he might direct or authorize. We have
nothing on the record to disclose whether the Superintending
Engineer, though he acted under oral instructions of the
Minister, was authorized by the Governor or under relevant
rules to enter into such a contract. That apart, even if
Exs. D-67 and D-68 together were treated as forming part of
a contract entered into between the Government and Karale,
can it be said that the said contract was expressed to be
made in the name of the Governor? Ex facie it cannot be
said so. But it is contended that on a liberal construc-
tion, which we should adopt in a case where the Government
is trying to go back on its solemn promise, such a formality
can easily be read into the said documents. Before we
construe the said two documents in order to ascertain
whether such a formality has been complied with or not, it
would be convenient to notice some of the decisions of this
Court. The question of construction of s. 175(3) of the
Government of India Act, 1935, directly arose for decision
in Seth Bikhraj Jaipuria v. Union of India(1). There, the
Divisional Superintendent, East Indian Railway, placed
certain orders with the appellant for the supply of
foodgrains for the employees of the said Railway. The
orders were not expressed to be made in the name of the
Governor -General and was not executed on behalf of the
Governor General as required by s. 175(3) of the Government
of India Act, 1935. They were signed by the Divisional
Superintendent either in his own hand or in the hand of his
Personal Assistant. This Court held that the contracts, not
having been expressed to be entered into by the ,Governor-
General and not having been executed on his behalf, were
void. This Court held that the provisions of s. 175(3) of
the Government of India Act, 1935, were mandatory and,
therefore, the contracts were void. This decision was
followed by this Court in New Marine Coal Co. v. The Union
of India(2). Reliance is placed by the
(1) [1962] 2 C.R. 880. (2) [1964] 2 S.C.R. 859.
1000
learned counsel for the appellant on the decision of this
Court in Union of India v. Rallia Ram (1) in support of his
contention that though ex facie Exs. D-67 and D-68 do not
show that the contract was expressed to be made in the name
of the Governor, the said fact could be inferred from the
recitals. There, the goods offered to be sold belonged to
the Government of India. A tender notice was issued by the
Government of India, Department of Food (Division 111), in
the name of the Chief Director of Purchases. The Chief
Director of Purchases agreed to sell the goods on certain
conditions to the respondent and incorporated them in the
acceptance note, which was also headed “Government of India,
Department of Food (Division III), New Delhi”. The general
conditions of contract, which accompanied the letter of
acceptance, defined Government as meaning the Governor-
General for India in Council. On the said facts this Court
held that the correspondence between the parties ultimately
resulting in the acceptance note amounted to a contract
expressed to be made by the Government and, therefore, by
the Governor-General, “because it was the Governor-General
who invited tenders through the Chief Director of Purchases
and it was the Governor-General who, through the Chief
Director of Purchases, accepted the tender of the respondent
subject to the conditions prescribed therein”. Though in
the acceptance note it was not expressly stated that the
contract was executed on behalf of the Governor-General, on
a fair reading of the contents of the letter in the light of
the obligations undertaken thereunder, it was held that the
contract was executed on behalf of the Governor-General.
This decision does not depart from the principle accepted in
Seth Bikhraj Jaipuria’s case(2). On a fair reading of the
correspondence this Court construed that the contract was
entered into on behalf of the Governor-General and expressed
to be made in his name. Can it be said that in the present
case Exs. D-67 and D-68 disclose that the Superintending
Engineer was authorized to enter into a contract of the
nature mentioned therein on behalf of the Provincial
Government and that the contract was expressed to be made in
the name of the Governor?
(1) [1964] 3 S.C.R. 164. (2) [1962] 2 S.C.R. 880.
1001
Nothing has been placed before us to establish that the
Superintending Engineer was legally authorized to enter into
such a contract on behalf of the Government; nor do the
documents ex jacie show that the agreement was expressed to
be made in the name of the Provincial Government. The
letters mentioned the name of the Minister of the Public
Works Department and also the Government, in the context of
the rates that might be fixed thereafter, but the said
documents did not purport to emanate from the Governor. At
best they were issued under the directions of the Minister.
We find it difficult to stretch the point further, as such a
construction will make the provisions of s. 175(3) of the
Government of India Act, 1935, nugatory. We cannot,
therefore, hold that either the contract was entered into by
the person legally authorized by the Government to do so or
expressed to be made in the name of the Governor. The
agreement is void, as it has not complied with the
provisions of s. 175(3) of the Government of India Act,
1935.
In this view, it is not necessary to express our opinion on
other interesting questions raised in this case.
In the result, the appeal fails and is dismissed, but in the
circumstances, without costs.
Appeal dismissed.