{"id":102461,"date":"1961-07-24T00:00:00","date_gmt":"1961-07-23T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/seth-bikhraj-jaipuria-vs-union-of-india-on-24-july-1961"},"modified":"2017-10-08T04:16:59","modified_gmt":"2017-10-07T22:46:59","slug":"seth-bikhraj-jaipuria-vs-union-of-india-on-24-july-1961","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/seth-bikhraj-jaipuria-vs-union-of-india-on-24-july-1961","title":{"rendered":"Seth Bikhraj Jaipuria vs Union Of India on 24 July, 1961"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Seth Bikhraj Jaipuria vs Union Of India on 24 July, 1961<\/div>\n
Equivalent citations: 1962 AIR 113, \t\t 1962 SCR (2) 880<\/div>\n
Author: S C.<\/div>\n
Bench: Kapur, J.L., Subbarao, K., Hidayatullah, M., Shah, J.C., Dayal, Raghubar<\/div>\n
           PETITIONER:\nSETH BIKHRAJ JAIPURIA\n\n\tVs.\n\nRESPONDENT:\nUNION OF INDIA\n\nDATE OF JUDGMENT:\n24\/07\/1961\n\nBENCH:\nSHAH, J.C.\nBENCH:\nSHAH, J.C.\nKAPUR, J.L.\nSUBBARAO, K.\nHIDAYATULLAH, M.\nDAYAL, RAGHUBAR\n\nCITATION:\n 1962 AIR  113\t\t  1962 SCR  (2) 880\n CITATOR INFO :\n R\t    1962 SC 779\t (6,7)\n R\t    1963 SC1417\t (19)\n RF\t    1963 SC1685\t (9)\n R\t    1964 SC1714\t (10)\n RF\t    1966 SC 580\t (21)\n R\t    1967 SC 203\t (7)\n R\t    1968 SC1218\t (6)\n D\t    1969 SC 903\t (23)\n F\t    1972 SC 915\t (9)\n R\t    1977 SC 536\t (17)\n F\t    1977 SC2149\t (8)\n RF\t    1980 SC1285\t (9)\n R\t    1988 SC2149\t (13)\n F\t    1989 SC1160\t (26)\n\n\nACT:\nContract-Divisional   Superintendent  of   Railway   placing\norders-Contract\t not  expressed to be in name  of  Governor-\nGenera\t and  not executed on  behalf  of  Governor-General-\nWhether binding on Government-Government of India Act,\t1935\n(26 Geo. 6 Ch. 2) s. 175 (3).\n\n\n\nHEADNOTE:\nIn the year 1943 the Divisional Superintendent, East  Indian\nRailway\t placed certain purchase orders with  the  appellant\nfor  the supply of foodgrains for the employees of the\tEast\nIndian Railway.\t The orders were not expressed to be made in\nthe  name of the Governor-General and were not \"executed  on\nbehalf of the Governor-General as required by S. 175 (3)  of\nthe Government of India Act, 1935.  They were signed by\t the\nDivisional  Superintendent either in his own hand or in\t the\nhand   of  his\tPersonal  Assistant.   Some  deliveries\t  of\nfoodgrain  s were made under these orders and were  accepted\nand paid for by the Railway Administration.  But the Railway\nAdministration\tdeclined  to accept  further  deliveries  of\nfoodgrains.  The  appellant sold the balance  of  foodgrains\nunder  the purchase orders and filed a suit to\trecover\t the\ndifference  between  the  price realised  by  sale  and\t the\ncontract price.\t The respondent resisted the suit inter alia\non the ground that the contracts were not binding on it.\nHeld, that the contracts were not binding on the  respondent\nand  it\t was  not  liable for  damages\tfor  breach  of\t the\ncontracts.  Under s 175 (3) of the Government of India\tAct,\n1935,  as it stood at the relevant time, the contracts\thad:\n(a) to be expressed to be made by the Governor-General,\t (b)\nto be executed on behalf of the Governor-General and (F)  to\nbe executed by officers duly appointed in that behalf and in\nsuch mariner as the Governor-General directed or authorised.\nThe\n881\nauthority to a person to execute contracts may be  conferred\nnot   only  by\trules  expressly  trained  and\t by   formal\nnotifications  issued  in  this\t behalf\t but  may  also\t  be\nspecially  conferred.  The evidence in the case showed\tthat\nsuch  authority was specially conferred upon the  Divisional\nSuperintendent.\t But the contracts were not expressed to  be\nmade  by the Governor-General and were not executed  on\t his\nbehalf\tThe  provisions of s. 175(3)  were  mandatory.\t The\nobject\tof  enacting  these provisions was  that  the  State\nshould\tnot  be\t saddled  with\tliability  for\tunauthorised\ncontracts and hence it was provided that the contracts trust\nshow  on  their face that they were made  by  the  Governor-\nGeneral and executed on his behalf in the manner  prescribed\nby the person authorised.\nState  of Bihar v. M\/s.\t Karam Chand Thapar and Bros.,\tLtd.<\/a>\n(1962) 1 S. C. R. 827, followed.\nLiverpool  Borough Bank v. Turner, (1861) 30 L. J. Ch.\t379,\nMunicipal  Corporation of  Bombay v. Secretary of State,  I.\nL.  R.\t(1903)\t29 Bom. 580, Kessoram  Poddar  and  Co.,  v.\nSecretary of State for India, I. L. R. (1927) 54 Cal. 969 S.\nC.  Mitra and Co., v. Governor-General of India in  Council,\nI.L.R.\t(1950)\t2 Cal. 431, Secretary of State\tv.  Yadavgir\nDharamgir, I. L. R. (1936) 60 Bom. 42, Secretary of State v.\nG.T.  Sarin  and Co., 1. L. R. (1930) 11 Lah.  375,  U.\t I'.\nGovernment  v.\tLal Nanhoo Mal Gupta, A. 1. R.\t(1960)\tAll.\n420, and Devi Prasad Sri Krishna Prasad Ltd. v. Secretary of\nState, I. L. R. (1941) All. 741, referred to.\nS.   K. Sen v. Provincial P. W. D., State of Bihar, A. 1. R.\n(1960)\tPat.,  Chatturbhui  Vithaldas  Jasani  v.  Moreshwar\nPrashram,<\/a>  (1954)  S. C. R. 817,J.  K. Gas Plant  Mfg.,\t Co.\n(Rampur)  Ltd.\tv.  King  Emperor,  (1947)  F.\tC.  R.\t141,\nMoreshwar Pangarkar v. State of Bombay,<\/a> (1952) S. C. R. 612,\nState of Bombay v. Purshottam Jog Naik,<\/a> (1952) S. C. R.\t 674\nand State of U.P. v. Manbodhan Lal Srivastava,<\/a> (1958) S.  C.\nR. 533, distinguished.\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 86 of 1959.
\nAppeal\tby special leave from the judgment and\torder  dated
\nMarch  27,  1957,  of the Patna High Court  in\tAppeal\tfrom
\nOriginal Decree No. 359 of 1948.\n<\/p>\n
A.   V.\t  Viswanatha  Sastri  and  S.  P.  Varma,  for\t the
\nappellant.\n<\/p>\n
882<\/span><\/p>\n
H.   N.\t Sanyal, Additional Solicitor-General of  India,  R.
\nGanapathy Iyer and T. M. Sen, for the respondent.
\n1961.  July, 24.  The Judgment of the Court was delivered by
\nSHAH, J. Bikhraj Jaipuria-hereinafter called the  appellant-
\nis  the sole proprietor of a grocery business  conducted  in
\nthe  name and style of “Rajaram Vijai Kumar” in the town  of
\nArrah  in  the State of Bihar.\tIn the months  of  July\t and
\nAugust,\t 1943, the, Divisional Superintendent,\tEast  Indian
\nRailway\t under three “-‘purchase orders’ agreed to  buy\t and
\nthe  appellant\tagreed to sell certain\tquantities  of\tfood
\ngrains for the employees of the East Indian Railway.
\nThe  ‘following\t table\tsets out the  purchase\tprices,\t the
\ncommodities,  the dates of purchase orders,  the  quantities
\nand the rates and the method of supply.\n<\/p>\n
Purchase   Date of   Kinds     Quantity\t\t  Rates.\nOrder\t   purchase   of\tof\nNo.\t  orders.     commo-   commo-\n\t      dity.\tdities.\n(1)\t(2)\t   (3)\t      (4)\t    (5)\n69. 20-7-1943.\tGram 1st 1000 mds.\t    @ Rs. 15\/\n\t    quality.\t\t   per md. (plus\n\t\t\t\t   cost of new\n\t\t\t\t   bags\t   not\n\t\t\t\t   exceeding\n\t\t\t\t   Rs. 75\/- per\n\t\t\t\t   100\t bags)\n\t\t\t\t   F.O.R. any\n\t\t\t\t   E.I.Rly. sta-\n\t\t\t\t   tion in Bihar.\n76.  :4-7-1943. Rice\t 1000 mds.\t   @ Rs. 22-8-0\n  Dhenki\t\t\t   (plus cost of\n  Medium\t\t\t   bags not ex-\n  quality.\t\t      ceeding Rs.75\n883<\/span>\n(1)\t  (2)\t    (3)\t\t  (4)\t       (5)\n\t\t\t\t     per cent) per\n\t\t\t\t     md. F.O.R. any\n\t\t\t\t     station on the\n\t\t\t\t     division.\n\t   ii. Wheat 5000 mds.\t     @ Rs. 20-8-0\n\t\t white\t\t     per md. with\n\t      as per\t\t     bags F.O.R.\n\t     sample.\t\t     any station\n\t\t\t\t     on E.I.R. on\n\t\t\t\t     the Division.\n106. 24-8-1943.\t   Rice\t 15000 mds.\t    @ Rs. 24\/-\n\t  medium\t\t      per md. with-\n\t   quality.\t\t      out   bags\n\t\t\t\t      F.O.R. E.I.\n\t\t\t\t      Rly. station\n\t\t\t\t      in Bihar.\n<\/pre>\n
Purchase orders Nos. 69 and 76 were signed by S.C.  Ribbins,
\nPersonal  Assistant  to the Division at\t Superintendent\t and
\npurchase  order\t No.  106  was\tsigned\tby  the\t  Divisional
\nSuperintendent.\t  Under\t the  purchase\torders\tdelivery  of
\ngrains was to commence within seven days’ of acceptance\t and
\nwas  to’  be  completed within\tone  month.   The  appellant
\ndelivered diverse quantities of foodgrains from time to time
\nbut  was unable fully to perform the contracts\twithin,\t the
\nperiod\tstipulated.  Between July.), 20, 1943 and August  of
\n4,  1943,  he  supplied\t 3465 maunds  of  rice\tand  between
\nSeptember  1, 1943 and September 19, 1943 he  supplied\t1152
\nmaunds\t35  seers  of  wheat.  In  exercise  of\t the  powers
\nconferred by cl.(b) of Sub-r. (2) of r.81 of the Defence  of
\nIndia  Rules,  the Government of Bihar by  notification\t No.
\n12691-P.C.   dated   September\t16,   1943   directed\tthat
\ncommodities  named  in column I of the schedule\t shall\tnot,
\nfrom  and  including September 20, 1943\t and  until  further
\nnotice,\t be sold at any primary source of supply or  by\t the
\nproprietor, manager or employee of any mill in the  Province
\nof Bihar at prices exceeding those
\n884<\/span>
\nspecified  in  the  second  column  of\tthe  schedule.\t The
\ncontrolled rat-. of rice (medium) was Rs. 18\/- per  standard
\nmaund,\tof wheat (red) Rs. 17\/-, of wheat (white)  Rs.\t18\/-
\nand  of\t gram Rs. 12-8-0.   The\t Sub-Divisional\t Magistrate,
\nDistrict Arrah issued on September 21, 1943, a price-list of
\ncontrolled articles fixing the same prices as were fixed for
\nwheat,\trice  and  gram by the notification  issued  by\t the
\nGovernment  of\tBihar.\tBy cl. (2) of  the  notification,  a
\nwarning was issued that in the event of the dealers  selling
\ncontrolled articles at rates exceeding those fixed or  with-
\nholding\t stocks\t of such articles from sale, “they  will  be
\nliable to prosecution under r.81 (1) of the Defence of India
\nRules.”\n<\/p>\n
By  a telegraphic communication dated Sep. tember 28,  1943,
\nthe  Divisional Superintendent informed the  appellant\tthat
\nunder the purchase orders, foodgrains tendered for  delivery
\nwill  not,  unless  despatched before October  1,  1943,  be
\naccepted,  and barring a consignment of 637 maunds 20  seers
\naccepted  on  October 7, 1943,\tthe  Railway  Administration
\ndeclined  to  accept,delivery of food grains offered  to  be
\nsupplied  by  the  appellant after  October  1,\t 1943.\t The
\nappellant served a notice upon the Divisional Superintendent
\ncoraplaining of breach of contract and sold between February
\nla and February 23, 1944 the balance of foodgrains under the
\npurchase  orders  which\t were lying either  at\tthe  various
\nrailway stations or in his own godowns.\t The appellant\tthen
\ncalled upon the Railway Administration to pay the difference
\nbetween\t the price realised by sale and the  contract  price
\nand  failing  to obtain satisfaction,  commenced  an  action
\n(Suit  No.  359\/48A) in the court of  the  First  Additional
\nSubordinate Judge, Patna for a decree for Rs.  2,89,995-15-3
\nagainst\t the Dominion of India.\t The appellant\tclaimed\t Rs.
\n2,32,665-12-0  being  the difference  between  the  contract
\nprice and the price realised, Rs.42,709-10-3 as interest and
\nRs. 14,620-9-0 as freight, wharf.\n<\/p>\n
885<\/span><\/p>\n
age, cartage, price of packing material, labour charges and-
\ncosts incurred in holding the sale.  The appellant submitted
\nthat  under the terms of the purchase orders, supply was  to
\ncommence  within  seven days of the date of receipt  of\t the
\norders and was to be completed within one month, but it\t was
\nnot  intended  that  time should be of the  essence  of\t the
\ncontract,   and\t  in  the  alternative\tthat   the   Railway
\nAdministration had waived the stipulation as to time in\t the
\nperformance of the contracts and therefore he was  entitled,
\nthe  Railway Administration having committed breach of\t,the
\ncontracts, to recover as compensation the difference between
\nthe  contract price and the price for which the grains\twere
\nsold.\tThe  suit  was resisted by  the\t Dominion  of  India
\ncontending  inter  alia that the appellant had no  cause  of
\naction for the claim in the suit, that the contracts between
\nthe appellant and the Divisional Superintendent Dinapur were
\nnot valid and binding upon the Government of India and\tthat
\nthe  contracts were liable to be avoided by the\t Government,
\nthat  time  was\t of  the  essence  of  the  contracts,\tthat
\nstipulations as to time were not waived, and that no  breach
\nof  contract  was  committed  by  the  East  Indian  Railway
\nAdministration\tand  in\t any event, the\t appellant  had\t not
\nsuffered  any  loss  as a result of  such  breach.   By\t the
\nwritten\t statement,  it wag admitted that  the\tEast  Indian
\nRailway\t through the Divisional Superintendent, Dinapur\t had
\nby three orders set out in the plaint agreed to buy and\t the
\nappellant  had\tagreed\tto sell\t the  commodities  specified
\ntherein,   but\t it   was   denied   that   the\t  Divisional
\nSuperintendent had been “”given complete authority to  enter
\ninto contracts for the supply of foodgrains.”
\n The  trial court held that time was not of the\t essence  of
\nthe contracts and even if it was, breach of the\t stipulation
\nin  that behalf was waived.  It further_held that  the\tplea
\nthat  the  contracts  were void because\t they  were  not  in
\naccordance with the
\n886<\/span>
\nprovisions  of\ts. 175 (3) of the Government of\t India\tAct,
\n1935,  could  not  be.permitted to be urged,  no  such\tplea
\nhaving\tbeen raised by the written statement.  Holding\tthat
\nthe  Divisional Superintendent was authorised to enter\tinto
\nthe  contracts for purchase of foodgrains, and that  he\t had
\ncommitted breach of contracts the trial Judge awarded to the
\nappellant Rs. 1,29,460-7-0 with interest thereon at the rate
\nof  6%\tper annum from October 1, 1943, to the date  of\t the
\ninstitution  of\t the  suit and further\tinterest  at  6%  on
\njudgment.   Against that decree, an appeal was preferred  by
\nthe Union of India to the High Court of Judicature at  Patna
\nand  the  appellant  filed cross-objections  to\t the  decree
\nappealed  from.\t  The High Court held that time was  of\t the
\nessence\t of  the contracts, but the  Railway  Administration
\nhaving a accepted the goods tendered after the expiration of
\nthe  period prescribed thereby, the stipulation as  to\ttime
\nwas  waived.   The  High  Court further\t held  that  by\t the
\nnotification  under  r. 81 of the Defence  of  India  Rules,
\nperformance  of the contracts had not been rendered  illegal
\nbut the Divisional Superintendent had no authority to  enter
\ninto  contracts\t to purchase food grains on  behalf  of\t the
\nRailway Administration and that in any event, the  contracts
\nnot having been expressed to be made by the Governor-General
\nand  not  having been executed on behalf  of  the  Governor-
\nGeneral by an officer daily appointed in that behalf and  in
\nmanner\tprescribed, the contracts were\tunenforceable.\t The
\nHigh Court also held that the appellant was not entitled  to
\na decree for compensation because he had failed to prove the
\nruling\tmarket\trate on the date of breach viz,\t October  1,
\n1943.\tThe  High Court also observed that the\ttrial  court
\nerred in awarding interest prior to the date of the suit and
\nin  so\tholding,  relied upon the  judgment  of\t the  Privy-
\nCouncil in Bengal Nagpur Railway Co., Ltd. v. Ruttanji Ramji
\nand others (1).\n<\/p>\n
(1) L.\t  R. (1938) 65 J. A. 66.\n<\/p>\n
\t\t    887<\/span><\/p>\n
In  this appeal by the appellant, two questions fall  to  be
\ndetermined,  (1)  whether relying upon the  purchase  orders
\nsigned by the Divisional Superintendent which were not\tmade
\nand  executed in the manner prescribed by s.175 (3) of\tthe,
\nGovernment  of India Act 1935, the appellant could  sue\t the
\nDominion  of India for compensation for breach of  contract,
\nand  (2) whether the appellant has proved the ruling  market
\nrate on October 1, 1943 for the commodities in question. ,
\nThe  finding that the Railway Administration had waived\t the
\nstipulation  as to the performance of the  contracts  within
\nthe  time prescribed though time was under the agreement  of
\nthe  essence, is not challenged before us on behalf  of\t the
\nUnion  of  India.  If the finding as to waiver\tis  correct,
\nmanifestly by his telegraphic intimation dated September 28,
\n1943,  that the foodgrains not despatched before October  1,
\n1943,  will  not be accepted the  Divisional  Superintendent
\ncommitted a breach of the contract.\n<\/p>\n
Section\t 175 (3) of the Government of India Act as in  force
\nat the material time provided :\n<\/p>\n
“Subject to the provisions of this Act, with respect to\t the
\nFederal\t Railway  Authority,  all  contracts  made  in\t the
\nexercise of the executive authority of the Federation or  of
\na  Province shall be expressed to be made by  the  Governor-
\nGeneral, or by the Governor of the Province, as the case may
\nbe,  and all such contracts and all assurances\tof  property
\nmade in the exercise of that authority shall be executed  on
\nbehalf\tof the Governor-General or Governor by such  persons
\nand in such manner as he may direct or authorise.”
\nThe  Federal Railway Authority had not come. into  being  in
\nthe  year 1943: it was in fact never set up.  The  contracts
\nfor  the supply of foodgrains were undoubtedly_ made in\t the
\nexercise of executive
\n888<\/span>
\nauthority  of the Federation.  The contracts  had  therefore
\nunder  s.  175(3),  (a) to be expressed to be  made  by\t the
\nGovernor-General,  (b)\tto  be executed\t on  behalf  of\t the
\nGovernor-General,  and (e) to be execrated by officers\tduly
\nappointed in that behalf and in such manner as the Governor-
\nGeneral\t may direct or authorise.  But no  formal  contracts
\nwere executed for the supply of foodgrains by the  appellant
\n:  he  had merely offered to supply  foodgrains\t by  letters
\naddressed to the Divisional Superintendent and that  officer
\nhad  by\t what are called “purchase  orders”  accepted  those
\noffers.\t These purchase orders were not expressed to be made
\nin the name of the Governor-General and were not executed on
\nbehalf\tof the Governor-General.  The purchase\torders\twere
\nsigned\tby the Divisional Superintendent either in  his\t own
\nhand or in the hand of his Personal Assistant.\tIn the first
\ninstance  it  has to be considered  whether  the  Divisional
\nSuperintendent\thad authority to contract on behalf  of\t the
\nRailway Administration for buying foodgrains required by the
\nRailway Administration.\t By Ex.M-2 which was in operation at
\nthe  material time, all instruments relating to purchase  or
\nhire, supply and conveyance of materials, stores, machinery,
\nplant,\ttelephone lines and connections, coal etc. could  be
\nexecuted  amongst others by the\t Divisional  Superintendent;
\nbut  contracts\trelating to purchase of foodgrains  are\t not
\ncovered\t by  that  authority.  Under item 34  which  is\t the
\nresiduary  item,  all  deeds  and  instruments\trelating  to
\nrailway matters other than those specified in items 1 to  33
\nmay  be executed by the Secretary of the Railway Board.\t  It
\nis  common  ground  that  there\t is  no\t other\titem   which
\nspecifically   authorises  the\tmaking\tand   execution\t  of
\ncontracts  relating  to purchase of  foodgrains;  deeds\t and
\ninstruments  relating to purchase of food  grains  therefore
\nfall within item 34.  The Secretary to the Railway Board had
\nnot  executed  these purchase orders : but the\ttrial  Court
\nheld
\n889<\/span>
\nthat  the Divisional Superintendent was authorised to  enter
\ninto  contracts\t with  the  appellant  for  the\t supply\t  of
\nfoodgrains.  In so holding, the trial judge relied upon\t the
\nevidence  of  Ribbins,\tGrain Supply  Officer  and  Personal
\nAssistant  to the Divisional Superintendent,  Dinapur.\t The
\nHigh  Court  disagreed\twith  that  view.   The\t High  Court
\nobserved that the authority of the officer acting on  behalf
\nof  the Governor-General “must be deduced from\tthe  express
\nwords  of  the Governor-General himself expressed  by  rules
\nframed\tor  by\tnotification issued, under  s.\t175(3).\t  No
\nnotification has been produced in this case showing that the
\nDivisional   Superintendent  had  been\tauthorised  by\t the
\nGovernor  General to execute such contracts on\this  behalf,
\nnor  has  any rule been produced which\tconferred  authority
\nupon the Divisional Superintendent to make such contracts.”
\nAfter referring to paragraph 10 of the notification, Ex.  M-
\n2 items 1 to 34, the High Court observed:\n<\/p>\n
“Therefore   this   notification  rather  shows\t  that\t the
\nDivisional  Superintendent had no authority to\texecute\t the
\ncontracts for the purchase of food grains.”
\nIn our view, the High Court was in error in holding that the
\nauthority  under s. 175(3) of the Government of\t India\tAct,
\n1935  to execute the contract could only be granted  by\t the
\nGovernor  General  by rules expressly  promulgated  in\tthat
\nbehalf or by formal notifications.  This court has  recently
\nheld that special authority may validly be given in  respect
\nof a particular contract or contracts by the Governor to  an
\nofficer other than the officer notified under the rules made
\nunder s. 175(3).  In The State of Bihar v. M\/s.\t Karam Chand
\nThapar\tand Brothers Ltd.<\/a>(,), Venkatarama Aiyar J.  speaking
\nfor the court observed :\n<\/p>\n
(1)  (1962) 1 S.C.R. 827.\n<\/p>\n
890<\/span><\/p>\n
It  was further argued for the appellant that there being  a
\nGovernment notification of a formal character we should\t not
\ntravel outside it and find authority in a person who is\t not
\nauthorised  thereunder.\t But s. 175 (3) does  not  prescribe
\nany  particular mode id which authority must  be  conferred.
\nNormally, no doubt, such conferment will be by\tnotification
\nin the Official Gazette, but there is nothing in the section
\nitself\tto preclude authorisation being conferred ad hoc  on
\nany  person, and when that is established, the\trequirements
\nof the section must be held to be satisfied.”
\nIn that case, an agreement to refer to arbitration on behalf
\nof  the\t Government of Bihar was executed by  the  Executive
\nEngineer   whereas  by\tthe  notification  issued   by\t the
\nGovernment of Bihar under s.175 (3) all instruments in\tthat
\nbehalf\thad  to be executed by the Secretary  or  the  Joint
\nSecretary to the Government.  This Court on a  consideration
\nof  the correspondence produced in the case agreed with\t the
\nHigh  Court that the Executive Engineer had  been  specially
\nauthorised  by the Governor acting through his Secretary  to
\nexecute the agreement for reference to arbitration.  Section
\n175  (3)  in terms does not provide that  the  direction  or
\nauthority given by the Governor-General or the Governor to a
\nperson to execute contracts shall be given only by rules  or
\nby notifications, and the High Court was in our judgment  in
\nerror  in assuming that such authority can be given only  by
\nrules expressly framed or by formal notifications issued  in
\nthat behalf.\n<\/p>\n
In para 5 of the plaint, the appellant pleaded:
\n“‘That for the purposes and under the authority conferred as
\nnoted in the para 3 above in July and August, 1943 the\tsaid
\nE.  1.\tRly.  through its  then\t Divisional  Superintendent,
\nDinapur,  by  three  diverse orders agreed to  buy  and\t the
\nplaintiff  agreed to sell the following commodities  at\t the
\nrates mentioned against them,
\n891<\/span>
\nBy  para 3 of the written statement, the Dominion  of  India
\naccepted  the allegations made in para 5 of the plaint.\t  It
\nis true that by paragraph 1, the authority of the Divisional
\nSuperintendent\tto enter into contract with,  trading  firms
\ndealing\t in  foodgrains\t for the supply\t of  foodgrains\t was
\ndenied\tand  it\t was  further  denied  that  the  Divisional
\nSuperintendent\t“was  invested with  complete  authority  to
\nenter  into contracts for the purchase of food supplies\t and
\nto do all that was necessary in that connection.” There\t was
\nsome inconsistency between the averments made in  paragraphs
\n1  and 3 of the written statement, but there is\t no  dispute
\nthat  the  purchase  orders were issued\t by  the  Divisional
\nSuperintendent for and on behalf of the East Indian  Railway
\nAdministration.\t Pursuant to these purchase orders, a  large
\nquantity of foodgrains was tendered by the appellant:  these
\nwere  accepted by the Railway Administration  and,  payments
\nwere  made  to\tthe  appellant\tfor  the  grains   supplied.
\nEmployees of the Railway Administration wrote letters to the
\nappellant  calling  upon him to intimate the  names  of\t the
\nrailway\t stations where grains will be delivered  and  about
\nthe  date  when\t the  supply.  will  commence.\t They  fixed
\nprogrammes  for inspection of the goods, kept ‘wagons  ready
\nfor  accepting delivery, held meetings on diverse  occasions
\nfor  settling programmes for the supply of grains,  rejected
\ngrains\twhich  were not according to the  contract,  entered
\ninto  correspondence with the appellant about the return  of
\nempty bags accepted bills and railway receipts and made pay-
\nments,\treturned  certain  bills in respect  of\t the  grains
\ntendered beyond the period of contract and did diverse other
\nacts in respect of the goods which could only be  consistent
\nwith  the contracts having been made with the  authority  of
\nthe   Railway  Administration  granted\tto  the\t  Divisional
\nSuperintendent.\t There is also the evidence of Ribbins which
\nclearly\t supports the vie* that the agreements\tto  purchase
\nfoodgrains by the Divisional
\n892<\/span>
\nSuperintendent were part of a. scheme devised by the Railway
\nAdministration at the time of the, serious famine in 1943 in
\nBengal.\t In cross-examination, Ribbins stated:
\n“When  the  Bengal  famine  arose  in  April-May  1943,\t the
\n(necessity  for\t a  scheme  of)\t arrangement  of   supplying
\nfoodgrains to E. I. Railway employees arose … A scheme was
\ndrawn  up for carrying out this work in writing.   In  other
\nwords  orders were received from Head Office Calcutta  about
\nit.  The Deputy General Manager, Grains, Calcutta issued the
\nnecessary  orders … The agent or General Manager as he  is
\ncalled\tappropriated  the above functionary.  He  must\thave
\ndone  so presumably under orders … The entire\t scheme\t did
\nsubsequently get the assent of the Railway Board.  From time
\nto  time order came with instruction from Head Office.\t All
\nsuch  directions  should  be in the  office  of\t D.  Supdt.,
\nDinapur.  Some posts had to be created for carrying out this
\nscheme.\t Originally one post of Asstt.\tGrain Supply Officer
\nwas created.  Subsequently, two posts were created one on  a
\nsenior\tscale and the other as Asstt. in Dinapur  Dv.  staff
\nhad  to\t be appointed to be in charge of  the  grain  shops.
\nThey  were  exclusively\t appointed to work  the\t grain\tshop
\nOrganisation.\tThe  Railway made some arrangement  in\tsome
\nplaces\tfor  accommodation  and\t additional  storage…Grain
\nshops  were located At these places when  accommodation\t was
\nmade for additional storage.”\n<\/p>\n
Ribbins\t was for some time a Grain Supply Officer under\t the
\nEast  Indian Railway and he admitted that orders  similar.to
\nthe  purchase  orders in question in  this  litigation\twere
\ndrawn  up in cyclostyled forms “as per orders from the\tHead
\nOffice.”  The  witness stated that the instructions  of\t the
\nHead  Office  were  “in the office  file”.   None  of  these
\ndocuments were, however, produced or tendered in evidence by
\nthe Railway Administration.\n<\/p>\n
893<\/span><\/p>\n
The  evidence on the whole establishes that with a  view  to
\neffectuate  the\t scheme\t devised by the\t Railway  Board\t for
\ndistributing  foodgrains to their employees at\tconcessional
\nrates,\tarrangements  were made\t for  procuring\t foodgrains.
\nThis  scheme received the approval of the Railway Board\t and
\nRailway Officers were authorised to purchase, transport\t and
\ndistribute  foodgrains.\t  If, in the implementation  of\t the
\nscheme,\t  the  foodgrains  were\t received  by  the   Railway
\nAdministration, special wagons were provided and goods\twere
\ncarried\t to  different places and distributed  and  payments
\nwere  made  for\t the  foodgrains  received  by\tthe  Railway
\nAdministration after testing the supplies, the inference  is
\ninevitable that the Divisional Superintendent who issued the
\npurchase  orders acted with authority specially\t granted  to
\nhim.   The evidence of Ribbins supported by  abundant  docu-
\nmentary\t  evidence   establishes  beyond  doubt\t  that\t the
\nDivisional Superintendent though not expressly authorised by
\nthe  notification Ex.  M-2 to contract for the\tpurchase  of
\nfoodgrains,  was  specially authorised to enter\t into  these
\ncontracts for the purchase of foodgrains.
\nThe  question  still  remains whether  the  purchase  orders
\nexecuted by the Divisional Superintendent but which were not
\nexpressed  to be made by the Governor-General and  were\t not
\nexecuted on behalf of the Governor-General, were binding  on
\nthe  Government of India.  Section 175(3)  plainly  requires
\nthat contracts on behalf of the Government of India shall be
\nexecuted  in  the  form prescribed  thereby  ;\tthe  section
\nhowever does not set out the consequences of non-compliance.
\nWhere  a statute requires that a thing shall be done in\t the
\nprescribed  manner  or\tform  but  does\t not  set  out\t the
\nconsequences  of  non-compliance, the question\twhether\t the
\nprovision  was mandatory or directory has to be adjudged  in
\nthe  light of the intention of the legislature as  disclosed
\nby the
\n894<\/span>
\nobject,\t put-pose and scope of the statute.  If the  statute
\nis  mandatory,\tthe  thing done not in the  manner  or\tform
\nprescribed  can\t have  no  effect or validity  :  if  it  is
\ndirectory,  penalty may be incurred for non-compliance,\t but
\nthe  act or thing done is regarded as good.  As observed  in
\nMaxwell on Interpretation of Statutes 10th Edition p. 376 :
\n“It  has  been\tsaid  that no, rule can\t be  laid  down\t for
\ndetermining  whether  the command is to be considered  as  a
\nmere  direction\t or instruction\t involving  no\tinvalidating
\nconsequences  in  its disregard, or as imperative,  with  an
\nimplied\t  nullification\t  for\tdisobedience,\tbeyond\t the
\nfundamental one that it depends on the scope. and object  of
\nthe enactment.\tIt may perhaps be found generally correct to
\nsay that nullification is the natural and usual\t consequence
\nof  disobedience, but the question is, in the main  governed
\nby considerations of convenience and justice, and when\tthat
\nresult\twould involve general inconvenience or injustice  to
\ninnocent  persons,  or\tadvantage to  those  guilty  of\t the
\nneglect,  without promoting the real aim and object  of\t the
\nenactment  such an intention is not to be attributed to\t the
\nlegislature.   The  whole scope and purpose of\tthe  statute
\nunder consideration must be regarded.”\n<\/p>\n
Lord  Campbell\tin  Liverpool  Borough\tBank  v.   Turner(1)
\nobserved
\n“No universal rule ‘can be laid down as to whether mandatory
\nenactments shall be considered directory only or  obligatory
\nwith  an implied nullification for disobedience.  It is\t the
\nduty of Court of justice to try to get at the real intention
\nof the Legislature by carefully attending to the whole scope
\nof the statute to be construed.”\n<\/p>\n
It  is\tclear that the Parliament intended in  enacting\t the
\nprovision contained in s. 175(3) that
\n(1)  (1861) 30 L. J. Ch. 379
\n\t\t    895<\/span>
\nthe   State  should  not  be  saddled  with  liability\t for
\nunauthorised  contracts and with that object  provided\tthat
\nthe contracts must show on their face that they are made  on
\nbehalf\tof  the State, i. e., by the Head of the  State\t and
\nexecuted  on his behalf and in the manner prescribed by\t the
\nperson authorised.  The provision, it appears, is enacted in
\nthe  public  interest,\tand  invests  public  servants\twith
\nauthority  to  bind  the State\tby  contractual\t obligations
\nincurred for the purposes of the State.\n<\/p>\n
It  is\tin  the interest of the\t public\t that  the  question
\nwhether\t a binding contract has been made between the  State
\nand a private individual should not be left open to  dispute
\nand litigation ; and that is why the legislature appears  to
\nhave  made a provision that the contract must be in  writing
\nand  must  on its face show that it is executed for  and  on
\nbehalf\tof  the\t head  of  the\tState  and  in\tthe   manner
\nprescribed.  The whole aim and object of the legislature  in
\nconferring  powers  upon  the head of  the  State  would  be
\ndefeated  if  in  the case of t contract which\tis  in\tform
\nambiguous,  disputes are permitted to be raised whether\t the
\ncontract  was intended to be made for and on behalf  of\t the
\nState or on behalf of the person making the contract.\tThis
\nconsideration  by  itself  would be sufficient\tto  imply  a
\nprohibition  against  a\t contract  being  effectively\tmade
\notherwise  than in the manner prescribed.  Itm is true\tthat
\nin  some  cases,  hardship  may\t result\t to  a\tperson\t not
\nconversant with the law who enters into a contract in a form
\nother than the one prescribed by law.  It also happens\tthat
\nthe Government contracts ,ire sometimes made in disregard of
\nthe forms prescribed ; but that would not in our judgment be
\na  ground for holding that departure from a provision  which
\nis  mandatory  and  at\tthe  same  time,  salutary  may\t  be
\npermitted.\n<\/p>\n
There is a large body of judicial opinion in the High Courts
\nin India on the question whether
\n896<\/span>
\ncontracts  not ill form prescribed by the Constitution\tActs
\nare binding upon the State.  The view has been\tconsistently
\nexpressed   that  the  provisions,  under   the\t  successive
\nConstitution  Acts relating to the form of contract  between
\nthe Government and the private individual are mandatory\t and
\nnot merely directory.\n<\/p>\n
In  Municipal  Corporation of Bombay v. Secretary  of  State
\n(1),  the  true effect of s. 1 of Si. 22 and 23 Vic.  c.  41
\nfell  to  be determined.  The Governor-General of  India  in
\nCouncil\t and the Governors in Council and officers  for\t the
\ntime  being entrusted with the Government were,\t subject  to
\nrestrictions  prescribed  by  the  Secretary  of  State\t  in
\nCouncil, empowered to sell and dispose of real and  personal
\nestate\tvested\tin Her Majesty and to raise  money  on\tsuch
\nestate\tand  also  to  enter  into  contracts  within.\t the
\nrespective  limits  for\t the purposes of  the  Act.  it\t was
\nprovided  that\tthe Secretary of State in  Council.  may  be
\nnamed  as a party to such deed, contract, or instrument\t and
\nthe  same  must\t be expressed to be made on  behalf  of\t the
\nSecretary  of  State in Council by or by the order.  of\t the
\nGovernor-General in Council or Governor in Council, but\t may
\nbe  executed  in  other respects in like  manner  as  other,
\ninstruments  executed  by  or  on  behalf  of  him  or\tthem
\nrespectively  in his or their official capacity, and may  be
\nenforced by or against the Secretary of State in Council for
\nthe time being.\t In a suit between the Government of  Bombay
\nand the Municipal Corporation of Bombay, the latter  claimed
\nthat it was entitled to remain in occupation on payment of a
\nnominal\t rent,\tof an extensive piece of land because  of  a
\nresolution  passed by the Government of\t Bombay\t sanctioning
\nsuch user.  Jenkins C. J. in delivering the judgement of the
\nCourt observed.\n<\/p>\n
“I think that a disposition in 1865 of Crown’
\n(1)  I. L. R. (1905) 29 Bom. 580.\n<\/p>\n
\t\t    897<\/span><\/p>\n
lands  by  the\tGovernor in Council was\t dependent  for\t its
\nvalidity  on an adherence to the forms prescribed, and\tthat
\ntherefore the Resolution was not a valid disposition of\t the
\nproperty for the interest claimed.”\n<\/p>\n
In  Kessoram Poddar and Co. v. Secretary of State for  India
\n(1),  it  was  held that in order that\ta  contract  may  be
\nbinding\t on the Secretary of State in Council., it  must  be
\nmade  in strict conformity with the provisions laid down  in
\nthe  statute governing the matter and if it is not so  made,
\nit is not valid as against him.\n<\/p>\n
The  same  view\t was expressed in S. C.\t Mitra\tand  Co.  v.
\nGovernor-General of India in Council (2), Secretary of State
\nv. Yadavgir Dharamgir(3), Secretary. of State and another v.
\nG. T. Sarin and, Company U. P. Government v. Lala Nanhoo Mal
\nGupta  Devi Prasad Sri Krishna Prasad Ltd.<\/a> v.  Secretary  of
\nState (6), and in S. K. Sen v. Provincial P. Way D. State of
\nBihar(7).\n<\/p>\n
But  Mr.  Viswanatha  Sastri  on  behalf  of  the  appellant
\ncontended  that this court in Chatturbhuj Vithaldas  Jasanth
\nv. Moreshwar Parashram<\/a> (8) has held that a contract for\t the
\nsupply\tof goods to the Government which is not in the\tform
\nprescribed  by\tArt. 299 (1) of the  Constitution  which  is
\nsubstantially the same form as s. 175 (3) of the  Government
\nof India Act, 1935) is not void and unenforceable.  In\tthat
\ncase,  the election of Chatturbhuj Jasani to the  Parliament
\nwas challenged on the ground that he had a share or interest
\nin  a  contract\t for  the  supply  of  goods  to  the  Union
\nGovernment.  It was found that Jasani was partner of a firm,
\nwhich  had entered into contracts with the Union  Government
\nfor  the  supply of goods and these contracts  subsisted  on
\nNovember 15, 1951 and
\n(1) I.L.R. (1927) 54 Cal. 969.(2) I.L.R. (1950) 2 Cal. 431.,
\n(3) I.L.R. (1936) 60 Bom. 42.(4) I.L.R. (1930) 11 Lah.375.
\n(5)  A.I.R. (1960) All. 420. (6) I.L.R. (1941) All. 741\t (7)
\n(7)   A.I.R. (1960) Pat. 159. (8) (1954) S. C.R. 817.\n<\/p>\n
898<\/span><\/p>\n
February  14,  1952 respectively the last  date\t for  filing
\nnominations  and the date of declaration of the\t results  of
\nthe election.  This court held that Jasani was\tdisqualified
\nfrom being elected by virtue of the disqualification set out
\nin  s. 7 (b) of the Representation of the People Act  43  of
\n1951.  The contracts in that case were admittedly not in the
\nform  Prescribed  by Art. 299 (1) of the  Constitution,\t and
\nrelying\t upon  that  circumstance, it  was  urged  that\t the
\ncontracts were void and had in law no existence.  In dealing
\nwith this plea, Bose J. speaking for the court observed :
\n“We  feel that some reasonable meaning must be\tattached  to
\narticle\t 299(1).   We  do  not\tthink  the  provisions\twere
\ninserted for the sake of mere form.  We feel they are  there
\nto safeguard Government against unauthorised contracts.\t  If
\nin fact a contract is unauthorised or in excess of authority
\nit  is right that Government should be safeguarded.  On\t the
\nother hand, an officer entering into a contract on behalf of
\nthe  Government\t can  always  safeguard\t himself  by  having
\nrecourse to the proper form.  In between is a large class of
\ncontracts,  probably by far the greatest in  numbers,  which
\nthough authorised, are for one reason or other not in proper
\nform.\tIt is only right that an innocent contracting  party
\nshould\tnot suffer because of this and if there is no  other
\ndefect or objection we have no doubt Government will  always
\naccept\tthe  responsibility.   If  not,\t its  interests\t are
\nsafeguarded as we think the Constitution intended that\tthey
\nshould be.”\n<\/p>\n
The learned Judge also observed:\n<\/p>\n
“It  would, in our opinion, be disastrous to hold  that\t the
\nhundreds of Government officers who have daily to enter into
\na  variety  of\tcontracts,  often of  a\t petty\tnature,\t and
\nsometimes in an emergency, cannot contract orally or through
\ncorrespondence and that every petty contract must be effect-
\ned  by\ta ponderous legal document couched in  a  particular
\nform.”\n<\/p>\n
\t\t    899<\/span><\/p>\n
The  rationale of the case in our judgment does not  support
\nthe  contention that a contract on behalf of a State not  in
\nthe form prescribed is enforceable against ‘the State.\tBose
\nJ. expressly stated that the “Government may not be bound by
\nthe contract, but that is a very different thing from saying
\nthat  the contract “,as void and of no effect, and  that  it
\nonly meant the principal (Government) could not be sued; but
\nthere will be nothing to prevent ratification if it was\t for
\nthe benefit of the Government.”\n<\/p>\n
The  facts proved in that case clearly establish  that\teven
\nthough\tthe  contract was not in the  form  prescribed,\t the
\nGovernment  had accepted performance of the contract by\t the
\nfirm  of which Jasani was a partner, and that in fact  there
\nsubsisted  a  relation between the Government and  the\tfirm
\nunder  which the goods were being supplied and\taccepted  by
\nthe Government.\t The agreement between the parties could not
\nin the case of dispute have been.enforced at law, but it was
\nstill  being  carried out according to its terms :  and\t the
\nCourt held that for the purpose of the Representation of the
\nPeople\tAct,  the existence of such an agreement  which\t was
\nbeing\tcarried\t  out  in  which   Jasani   was\t  interested
\ndisqualified  him.   It was clearly so stated when  Bose  J.
\nobserved:\n<\/p>\n
“Now  section 7 (d) of the Representation of the People\t Act
\ndoes  not  require that the contracts at ‘which\t it  strikes
\nshould\tbe  enforceable\t against the  Government  ;  all  it
\nrequires  is that the contracts should be for the supply  of
\ngoods to the Government.  The contracts in question are just
\nthat and so are hit by the section”.\n<\/p>\n
Reliance  was also placed by counsel for the appellant\tupon
\ncases  decided\tunder s.40 of the Government of\t India\tAct,
\n1915,  which  was  continued in operation.  even  after\t the
\nrepeal\tof  the\t Act,  1915, by\t the  9th  schedule  to\t the
\nGovernment of India
\n\t\t    900<\/span>
\nAct;  1985.  Section 40 prescribed the manner in  which\t the
\nbusiness  of  the  Governor-General in\tCouncil\t was  to  be
\nconducted.    It   provided  that  all\torders\t and   other
\nproceedings  of\t the Governor-General in  Council  shall  be
\nexpressed to be made by the Governor-General in Council\t and
\nshall be signed by a Secretary to the Government of India or
\notherwise as the Governor-General in Council may direct\t and
\nshall  not be called in question in any legal proceeding  on
\nthe  ground  that they were not duly made by  the  Governor-
\nGeneral in Council.\n<\/p>\n
In J.K. Gas Plant Manufacturing Co., (Rampur) Ltd., v.\tKing
\nEmperor\t (1),  certain\tpersons\t were  accused\tof  offences
\ncommitted  by them in contravention of cls. (5) and  (8)  of
\nthe  Iron and Steel (Control of Distribution)  Order,  1941,
\nwhich  order was not expressed to be made by  the  Governor-
\nGeneral\t in  Council  as required by s.\t 40(1)\tof  the\t 9th
\nschedule  to the Constitution Act.  The Federal\t Court\theld
\nthat  the  scope  and purpose of the Act did  not  demand  a
\nconstruction  giving  a mandatory rather  than\ta  directory
\neffect\tto the words in s. 40: for, in the  first  instance,
\nthe  provision\tthat all orders of the\tGovernor-General  in
\nCouncil\t shall\tbe  expressed to be made  by  the  Governor-
\nGeneral in Council did not define how orders were to be made
\nbut  only how they are to be expressed; it implied that\t the
\nprocess\t of  making  an order  preceded\t and  was  something
\ndifferent  from\t the  expression of it.\t  Secondly,  it\t was
\nobserved, the provision, was not confined to orders only and
\nincluded proceedings and in the case of proceedings, it\t was
\nstill  clearly a method of recording proceedings  which\t had
\nalready taken place in the manner prescribed rather than any
\nform  in which the proceedings, must take place if they\t are
\nvalid.\t Thirdly,  it  was  observed,  that  the   provision
\nrelating  to the signature by a Secretary to the  Government
\nof  India or other person indicated that it was a  provision
\nas
\n(1)  (1947) F.C.R. 141.\n<\/p>\n
\t\t    901<\/span><\/p>\n
to  the\t manner in which a previously made order  should  be
\nembodied  in publishable form, and it indicated that if\t the
\nprevious  directions as to the expression of the  order\t and
\nproceedings and as to the signature were complied with,\t the
\norder  and proceedings shall not be called in question in  a
\ncourt of law on one ground only.\n<\/p>\n
The rule contained in s. 40 (1) was in the view of the court
\none of evidence which dispensed with proof of the  authority
\ngranted\t by  the  GovernorGeneral in respect  of  orders  or
\nproceedings which complied with the requirements  prescribed
\n: the making of the order or the proceedings was independent
\nof the form of the order or proceedings expressing it.\t But
\nit  cannot  be\ts aid that the making  of  the\tcontract  is
\nindependent  of\t the  form in which  it\t is  executed.\t The
\ndocument  evidencing the contract is the sole repository  of
\nits  terms and it is by the execution of the  contract\tthat
\nthe liability ex contracti of either party arises.
\nThe  principle of J. K. Gas Plant Manufacturing\t Co.’s\tcase
\nhas therefore no application in the interpretation of s. 175
\n(3) of the Government of India Act, 1935.\n<\/p>\n
Reliance was also placed upon Dattatreya Moreshwar Pangarkar
\nv.  The\t State\tof Bombay<\/a> (1) and The  State  of  Bombay  v.
\nPurshottam Jog Naik<\/a>(2). In both these cases, orders made  by
\nthe Government of Bombay under the Preventive Detention\t Act
\nwere challenged on the ground that the orders did not comply
\nwith  the  requirements\t of Art. 166  of  the  Constitution.
\nArticle.  166  substantially prescribes the same  rules\t for
\nauthentication\tof the orders of the Governor of a State  as
\ns.  40 to the 9th schedule of the Government of\t India\tAct,
\n1935 prescribed for the authentication\tof the orders of the
\nGovernor-General  and  the Governors.  In the  former  case,
\nthis court observed that
\n(1)  (1952) S.C.R. 612.\n<\/p>\n
(2) (1952), S.C.R. 674.\n<\/p>\n
902<\/span><\/p>\n
the  Preventive Detention Act contemplates and requires\t the
\ntaking\tof an executive decision for confirming a  detention
\norder under s. 11 (1) and omission to make and\tauthenticate
\nthat decision in the form set out in Art. 166 will not\tmake
\nthe decision itself illegal,for the provisions in that arti-
\ncle  are merely directory and not mandatory.  In the  latter
\ncase, an order which purported to have been made in the name
\nof  the\t Government  of Bombay instead of  the\tGovernor  of
\nBombay as required by Art. 166 was not regarded as defective
\nand  it was observed that in any event, it was open  to\t the
\nState  Government  to prove that such an order\twas  validly
\nmade.\tThe  court in those cases therefore  held  that\t the
\nprovisions of Art. 166 are directory and not mandatory. ,
\nThese  cases  proceed on substantially the same\t grounds  on
\nwhich  the  decision in J. k. Gas  Plant  and  Manufacturing
\nCo.’s  case  ,\tproceeded,  and\t have  no  bearing  on\t the
\ninterpretation of s.\t 175 (3) of the Government of  India
\nAct, 1935.\n<\/p>\n
Reliance was also placed upon the State of U.P. v. Manbodhan
\nLal  Srivastava<\/a>(1)  in which case this court held  that\t the
\nprovisions  of\tArt.  320 el. (3) (e)  of  the\tConstitution
\nrelating  to  the  consultation\t with  the  Public   Service
\nCommission  before discharging at public servant are  merely
\ndirectory.\n<\/p>\n
The  fact that certain other provisions in the\tConstitution
\nare  regarded as merely directory and not mandatory,  is  no
\nground for holding that the provisions relating to the\tform
\nof contracts are not mandatory.\t It maybe said that the view
\nthat the provisions in the Constitution relating to the form
\nof  contracts on behalf of the Government are mandatory\t may
\ninvolve\t hardship to the unwary.  But a person who seeks  to
\ncontract  with\tthe Government must be deemed  to  be  fully
\naware of
\n(1)  (1958) S.C.R. 533.\n<\/p>\n
\t\t    903<\/span><\/p>\n
statutory requirements as to the form in which the  contract
\nis to be made.\tIn any event, inadvertence of an officer  of
\nthe  State executing A contract in manner violative  of\t the
\nexpress\t statutory  provision, the other  contracting  party
\nacquiescing in such violation out of ignorance or negligence
\nwill  not  justify  the court in not giving  effect  to\t the
\nintention of the legislature, the provision having been made
\nin  the interest of the public.\t It must therefore  be\theld
\nthat  as  the contract was not in the form required  by\t the
\nGovernment  of India Act, 1935, it could not be enforced  at
\nthe instance of the appellant and therefore the Dominion  of
\nIndia  could not be sued by the appellant  for\tcompensation
\nfor breach of contracts.\n<\/p>\n
We  are\t also of the view that the High Court was  right  in
\nholding\t that  the  appellant failed to prove  that  he\t was
\nentitled to compensation assuming that there was a valid and
\nenforceable  contract.\t The appellant claimed that  he\t was
\nentitled  to the difference between the contract  price\t and
\nthe  price realised by sale of the foodgrains offered  after
\nOctober\t  1,1943   but\t not   accepted\t  by   the   Railway
\nAdministration.\t The High Court rightly pointed out that the
\nappellant was, if at all, entitled only to compensation\t for
\nloss  suffered\tby him by reason of the wrongful  breach  of
\ncontract committed by the State, such compensation being the
\ndifference between the contract price and the ruling  market
\nrate on October 1,1943, and that the appellant had failed to
\nlead  evidence\tabout  the ruling  market  rate\t on  October
\n1,1943.\t  The trial judge held that the “control  price-list
\nxxx was reliable for ascertaining the measure of damages  in
\nthe case”.  This document was a notification relating to the
\ncontrolled  rates in operation in the district of Arrah,  by
\nwhich  the sale of foodgrains at prices exceeding the  rates
\nprescribed was made an offence.\t The appellant had obviously
\nthe option of delivering foodgrains at an railway station F.
\nO. R. in the Province of
\n904<\/span>
\nBihar, and there is no evidence on the record whether orders
\nsimilar\t to Ex.M-2 were issued by the authorities  in  other
\ndistricts  of  the  Bihar State.  But  if  the\tgrains\twere
\nsupplied  in  the  district of Arrah,  the  appellant  could
\nevidently  not seek to recover price for the goods  supplied
\nand  accepted  on  and\tafter  October\t1,  1943,  at  rates
\nexceeding those fixed by the notification; for, by the issue
\nof the control orders, on the contracts must be deemed to be
\nsuperimposed  the  condition that foodgrains shall  be\tsold
\nonly  at rates specified therein.  If the grains were to  be
\nsupplied  outside  the district of Arrah, the  case  of\t the
\nappellant  suffers from complete lack of evidence as to\t the
\nruling\trates  of the foodgrains in dispute  on\t October  1,
\n1943.\tThe High Court was therefore right in  declining  to
\naward damages.\n<\/p>\n
On  the view taken by us, this appeal must  stand  dismissed
\nwith costs.\n<\/p>\n
Appeal dismissed.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Seth Bikhraj Jaipuria vs Union Of India on 24 July, 1961 Equivalent citations: 1962 AIR 113, 1962 SCR (2) 880 Author: S C. Bench: Kapur, J.L., Subbarao, K., Hidayatullah, M., Shah, J.C., Dayal, Raghubar PETITIONER: SETH BIKHRAJ JAIPURIA Vs. RESPONDENT: UNION OF INDIA DATE OF JUDGMENT: 24\/07\/1961 BENCH: SHAH, J.C. BENCH: […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-102461","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nSeth Bikhraj Jaipuria vs Union Of India on 24 July, 1961 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/seth-bikhraj-jaipuria-vs-union-of-india-on-24-july-1961\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Seth Bikhraj Jaipuria vs Union Of India on 24 July, 1961 - 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