Sansar Chand v. Union of India — 1965 DIGILAW 163 (SC)

JUDGMENT : Subba Rao, J. There was a princely State of Chamba which merged in the State of Himachal Pradesh on April 15, 1948. Later on, under the States Reorganisation Act, 1956, it became Union Territory with effect from November 1, 1956. On April 9, 1948 i.e. before its merger in the Himachal Pradesh, Appellants 1 and 2 purchased the patta of the octroi contract relating to Chamba town and Sarol for the year Samvat 2005 of Chamba State for Rs. 1,31,000. Appellants 3 to 6 stood sureties for Appellants 1 and 2 for the payment of the amount due under the said contract. Appellants 1 and 2 paid from time to time sums under the contract to the Government totalling Rs. 98,274. The Union of India filed Suit No. 272 (Civil) in the Court of the Senior Subordinate Judge, Chamba, against the appellants for the recovery of the balance of a sum of Rs. 32,726 alleged to be due under the contract. The appellants contested the claim on technical as well as on substantive grounds. As we will deal with their contentions in the course of the judgment it is not necessary to give them in detail at this stage. The learned Subordinate Judge, on a consideration of the evidence, came to the conclusion that the appellants had "suffered a loss of more than the suit amount on account of the misrepresentations contained in the agreement and the subsequent imposition and the inefficient working of the control". On that finding he dismissed the suit with costs. The Union of India took the matter on appeal to the Judicial Commissioner, Himachal Pradesh, Simla. The learned Judicial Commissioner, on a consideration of the questions of fact and law raised in the case, arrived at a contrary conclusion: he held that the Union of India did not commit any breach of the terms of the contract and that it had not been established that the appellants incurred any damages by reason of the alleged breaches of the contract on the part of the Union of India. Hence the appeal. 2. The first contention of the learned counsel for the appellants was that the appeal filed in the Court of the Judicial Commissioner, Himachal Pradesh, was barred by limitation. Some facts are necessary to appreciate this contention. The appeal was presented on November 29, 1957, with a court fee of Rs. Hence the appeal. 2. The first contention of the learned counsel for the appellants was that the appeal filed in the Court of the Judicial Commissioner, Himachal Pradesh, was barred by limitation. Some facts are necessary to appreciate this contention. The appeal was presented on November 29, 1957, with a court fee of Rs. 1523-8-0 under the Himachal Pradesh Court Fees (Amendment) Act, 1952. The correct court fee payable was Rs. 1875. There was, therefore, a deficiency of Rs. 351-8-0. The said deficiency was made good on July 9, 1958. On June 21, 1959, an application was filed by the appellants in the Court of the Judicial Commissioner for excusing the delay in paying the deficit court fee. The learned Judicial Commissioner, for the reasons mentioned in his judgment, excused the delay. The result was that in law it must be held that the memorandum of appeal was filed with the requisite court fee. The argument was that the learned Judicial Commissioner had no jurisdiction to extend the time for paying the deficit court fee after the appeal was barred by limitation and, therefore, his order excusing the delay could not have rectified the defeat. This argument, if we may say so, was in the teeth of the express provisions of Section 149 of the Code of Civil Procedure , which read: "Where the whole or any part of any fee prescribed for any document by the law for the time being in force relating to court fees has not been paid, the Court may, in its discretion, at any stage, allow the person, by whom such fee is payable, to pay the whole or part, as the case may be, of such court fee; and upon such payment the document in respect of which such fee is payable, shall have the same force and effect as if such fee had been paid in the first instance." Under this section the court may exercise the discretion at any stage The expression "at any stage" is very wide and it does not impose any limitation such as that the discretion should be exercised only within the period of limitation prescribed for the filing of the appeal. The court cannot obviously circumscribe the wide phraseology used in the section by extraneous or equitable considerations. The court cannot obviously circumscribe the wide phraseology used in the section by extraneous or equitable considerations. The decision of this Court in Mahant Ramdas v. Ganga Das, AIR 1961 SC 882 relied upon by the learned counsel for the appellants in support of his contention does not bear him, out. There, the High Court made a peremptory order fixing the period for payment of deficit court fee and the appellant made an application for extension of time before the time fixed had run out, but the application came on for hearing before a Division Bench after the period had run out. It was held on a construction of Sections 148 and 149 of the Code of Civil Procedure, that an order extending the time for payment, though passed after the expiry of the time fixed, could operate from the date on which the time fixed expired. That decision was concerned only with the situation where a court fixed the period for payment but the amount was not paid within that time but the application for excusing the delay was filed within the prescribed time. Here we are confronted with a different situation. In the present case there was no order of a court prescribing the time for payment of court fee. The case directly falls within the express terms of Section 149 of the Code of Civil Procedure which clearly confers a discretionary power on the court to excuse delay at any stage. On the merits of the application for excusing the delay, the learned Judicial Commissioner had given relevant reasons, for excusing the delay. It is not for this Court to take a different view. This objection was, therefore, overruled. 3. The next contention turns upon clause 20 of the Patta, Ex. DW 31/B, for the year 2005 Samvat. On the merits of the application for excusing the delay, the learned Judicial Commissioner had given relevant reasons, for excusing the delay. It is not for this Court to take a different view. This objection was, therefore, overruled. 3. The next contention turns upon clause 20 of the Patta, Ex. DW 31/B, for the year 2005 Samvat. The said clause reads: "The octroi duty on cloth for the area to the right side of the river Ravi i.e. towards Chamba and the interior territory, shall be realised by the contractor and towards the left side of the River Ravi the duty shall be charged by the State (Sarkar) Government." It is said that the condition, namely, that in respect of the territory towards the left side of the River Ravi, called the trans-Ravi area, the duty shall be charged by the Government was an important term of the contract and as the Government admittedly gave up the levy of such duty in the said area from April 15, 1948, the Government committed a clear breach of the term and, therefore, it was liable to damages to the extent of Rs. 12,000 in respect of that breach. The learned Subordinate Judge held that under clause 20 of the Patta the Government was under a duty to impose octroi duty on cloth in the trans-Ravi area and as it committed a breach of that term the appellants suffered loss which the Government was bound to reimburse. The Judicial Commissioner on the other hand held that it had not been established that any damage was caused to the appellants by the remission of octroi in the trans-Ravi area. 4. Learned counsel for the Union of India contended that clause 20 of the patta had not been correctly translated, while the learned counsel for the appellants argued that the translation was correct. The translation is the court translation. In the absence of any agreement between the advocates we do not think we are justified in departing from the official translation. We, therefore, proceed on the basis that clause 20 of the patta has been correctly translated. 5. On the express terms of clause 20 of the patta the contention of the appellants must prevail. The expression "shall be charged" imposes a mandatory obligation on the State to do so. We, therefore, proceed on the basis that clause 20 of the patta has been correctly translated. 5. On the express terms of clause 20 of the patta the contention of the appellants must prevail. The expression "shall be charged" imposes a mandatory obligation on the State to do so. Indeed, the history of the clause indicates the reason for the introduction of a mandatory provision in that clause. It appears from the patta of the year 2002 Samvat, Ex. DW 31-A, that there was no provision for the levy of octroi duty in the trans-Ravi area. In that year the contract was auctioned for Rs. 49,000. In the pattas for Samvat 2003, 2004 and 2005 in which the present clause appeared the contracts were auctioned for Rs. 91,000, Rs. 1,12,000 and 1,31,000 respectively. In the patta for Samvat 2006 the said clause was not included and the auction price went down to Rs. 1,12,500. Prima facie these figures indicate that the presence of this clause was one of the contributing factors for the rise in the contract amounts. DW 16 deposed that during the years when there was no octroi duty on cloth, cloth in trans-Ravi area was sold at cheaper rates than in the Chamba town. The suggestion was that people went to trans-Ravi area to buy cloth at cheaper rates and that resulted in loss to the appellants, for otherwise there would have been a larger demand for cloth in the Chamba area. While we appreciate that there is plausibility in this argument, there are many imponderables in it. The fact that during the years when this clause in the present form was present in the pattas, larger amounts were paid under the respective contracts and when it was absent smaller amounts were paid is at best an indication of the contractor's expectancy of higher profits and nothing more. It would not show positively that loss was incurred in respect of the contract for the Samvat 2005 because of the breach of the contract by the Government. No plan was placed before us to give us a correct idea of the topography to indicate that the non-collection of the levy in the trans-Ravi area had a deleterious effect on the collection of the levy in the Chamba town area. No plan was placed before us to give us a correct idea of the topography to indicate that the non-collection of the levy in the trans-Ravi area had a deleterious effect on the collection of the levy in the Chamba town area. The material placed before us also does not disclose the mechanics of the levy, namely, how it was levied in trans-Ravi area, how its non-levy would affect the levy on the other side of the river. Various suggestions were thrown out during the course of the argument; but they were only surmises. The appellants could have produced their accounts in respect of the contract in question and also of other contracts and established by contrast that during Samvat 2005, compared to other years when there was a levy in the trans-Ravi area, the income was less. For reasons best known to the appellants they kept back the accounts. The entire evidence, even if believed, would only show that there was a likelihood of a fall in the collection of octroi duties in the Chamba area. The fact that a few witnesses said that they went to purchase cloth in the trans-Ravi area would not establish that that was the pattern of the purchases generally. Even if that was the pattern, it had not been satisfactorily explained to us how that fact could necessarily have affected that collections in the Chamba town area. In this state of the evidence when the learned Judicial Commissioner held that the appellants had not proved that they had incurred any damages on account of the non-levy of octroi duty in the trans-Ravi area, we cannot say that he went wrong. We, therefore, reject the contention of the appellants that the incurred loss on account of the non-levy of octroi duty on cloth in the trans-Ravi area. 6. The next contention is that, as the Government introduced cloth control with effect from August 2, 1948, Appellants 1 and 2 were subjected to loss which they were entitled to recoup from the respondents. This question is covered by Issue 8, which reads: "Whether on the imposition of cloth control the plaintiffs failed to appoint their nominee for the import of cloth which resulted in the lapse of monthly quotas? If so did the defendants suffer a loss of Rs. This question is covered by Issue 8, which reads: "Whether on the imposition of cloth control the plaintiffs failed to appoint their nominee for the import of cloth which resulted in the lapse of monthly quotas? If so did the defendants suffer a loss of Rs. 12,000 on that account and are the plaintiffs liable for the same?" The learned Subordinate Judge held that when the Government entered into contract with Appellants 1 and 2 it gave an assurance that it would do nothing to alter the conditions that were existing at the time of the auction of the contract to the prejudice of the said appellants and the Government by imposing control altered the condition in such a way that it caused damage to them. In the result, the learned Subordinate Judge held that the Government had committed a breach of contract and, therefore, it was bound to make good the loss suffered by Appellants 1 and 2 in its hands. Having regard to the fact that the Government officers did not issue quotas for cloth for 4 months in time and other circumstances, the learned Subordinate Judge assessed the loss to Appellants 1 and 2 under this head in a sum of Rs. 12,000. The learned Judicial Commissioner held that the imposition of controls was made under a valid statute and that in fact it had not been established that because of the delay in issuing cloth Appellant 1 and 2 incurred any loss under the said head. 7. The contract was between Appellants 1 and 2 and the State in whose shoes the Central Government now stands. The contract in question was entered into on April 9, 1948. Its term expired on March 31, 1949. The controls were imposed by the Government on August 2, 1948, in exercise of its powers under a valid statute, presumably in the interests of the public. As the controls were imposed under a valid law, the parties to the contract could only raise the plea that by reason of the said law there was a frustration of contract within the meaning of Section 56 of the Contract Act. In the present case it is not possible to contend that there was a frustration of the contract, for the inflow of cloth into the Chamba town area was not prohibited but only regulated. In the present case it is not possible to contend that there was a frustration of the contract, for the inflow of cloth into the Chamba town area was not prohibited but only regulated. Indeed, it is not even possible to say on the material placed before us that but for the controls there would have been a larger inflow of cloth into the said area: it may well have been that but for the quota system the cloth which entered the Chamba area would have been diverted to other places. The plea of frustration not being available to the appellants in the present case, the only other possible contention would be that the Government, being a party to the contract, committed a breach of the contract by negligently and inefficiently delaying the issue of the quotas and caused loss to the appellants. Assuming without deciding that a negligent discharge of a statutory duty by the Government would give a cause of action to the appellants, we are not satisfied that, because of the operation of the quota system, the cloth which otherwise would have passed to the Chamba area did not reach that place. We have already held that mere imposition of the quota system does not in itself establish any restriction in the quantum of cloth that would otherwise have reached the Chamba town area. But it is said that four monthly quotas were allowed to lapse because the appropriate authorities did not issue the quotas in time and that that fact would support the appellants' case. We have been taken through the evidence. It is true that the evidence discloses that the lifting of the quotas was irregular, but all the monthly quotas pertaining to the contract period were lifted during that period. On August 7, 1948, DW 28, Lala Diwan Chand, the Manager of the Central Cooperative Bank, Chamba, was appointed as a nominee to lift the quotas; but he ceased to be a nominee from August 26, 1948, and he was succeeded by the Cloth and Yarn Association. The evidence of DWs 28, 48 and 55 establishes that during the period when the Bank was the nominee, 87 bales forming the quota for the months of July and August and valued at Rs. 92,000 were brought by the Bank in November 1948; that after the said Association was appointed as the nominee cloth worth Rs. The evidence of DWs 28, 48 and 55 establishes that during the period when the Bank was the nominee, 87 bales forming the quota for the months of July and August and valued at Rs. 92,000 were brought by the Bank in November 1948; that after the said Association was appointed as the nominee cloth worth Rs. 26,346-9-9 was brought by the Association on January 23, 1949; cloth worth Rs. 1,14,304-14-9, on February 4, 1949; cloth worth Rs. 18,609-2-6 on March 3, 1949; cloth worth Rs. 22,938-5-3, on March 25, 1949; and cloth worth Rs. 32,822-0-6, on March 28, 1949, and that octroi duty at the rate of 6¼% was paid on the cloth imported. It may also be mentioned that the control order only affected handloom, silken and woollen cloths and not other cloths. It is, therefore, clear that though there was delay in the lifting of quotas, the quotas for the relevant months were lifted before the period of the contract in question expired. Appellants 1 and 2 could have produced better evidence, such as their accounts, to show what was the quantity of cloth that passed through Chamba town area and what was the octroi duty they collected thereon. For obvious reasons they kept back this important material from the court. We, therefore, hold, agreeing with the learned Judicial Commissioner, that the appellants failed to establish that by reason of the introduction of the quota system they suffered any damage. 8. It is then contended that the appellants were prevented from collecting octroi duty on the articles brought in by refugees and also on the foodgrains imported by the Rehabilitation Department for free distribution to the refugees. This contention is covered by Issue 5, which reads: "Did the defendants suffer a loss of Rs. 5500 on account of refugees bringing with them articles liable to octroi tax and the Rehabilitation Department importing ration etc. for them, without paying octroi? If so, are the plaintiffs liable for the same?" The learned Subordinate Judge held that the refugees did not bring with them articles liable to octroi duty and that no octroi duty was payable on the foodgrains imported by the Rehabilitation Department for free distribution to the refugees. The learned Judicial Commissioner accepted the said findings. 9. If so, are the plaintiffs liable for the same?" The learned Subordinate Judge held that the refugees did not bring with them articles liable to octroi duty and that no octroi duty was payable on the foodgrains imported by the Rehabilitation Department for free distribution to the refugees. The learned Judicial Commissioner accepted the said findings. 9. On the first part of the issue, namely, whether the refugees brought with them articles liable to octroi duty, there are concurrent findings of fact and it is the practice of this Court not to permit the appellants to question the correctness of the said findings. We, therefore, accept the said findings. But on the second aspect of the question the argument turns upon the expression "barai musarif Sarkari" found in Ex. PW 2-A, which is in the schedule to Ex. DW 31-B. It is argued that the exemption contemplated by the provision relates only to articles imported for the use of the former Ruler of Chamba. The contract was entered into between the Chamba State and the appellants. The exemption in favour of the "Sarkar" must necessarily refer to the State Government which was a party to the contract. If the expression "Sarkar" meant the person of the Ruler, the wording would have been different. The contract exempted from octroi duty goods brought in for the purpose of the Government. The Central Government admittedly got into the shoes of the Chamba State and the goods for the rehabilitation purposes were brought in for the purpose of the said Government. We, therefore, agreeing with the learned Judicial Commissioner, hold that the goods were exempt from octroi duty. We reject this contention. 10. It is then argued that there was an implied term of the contract that the Government was under a duty to employ police to prevent the evasion of the payment of the octroi duty by the refugees and that it failed to do so. All the terms of the contracts are reduced to writing. If the parties agreed that the Government should provide police guard to prevent evasion of payment of octroi duty, that should certainly have found a place in the agreement. The term imposing a duty upon the Government to provide a police guard is not a term necessary for carrying out the terms of the contract. If the parties agreed that the Government should provide police guard to prevent evasion of payment of octroi duty, that should certainly have found a place in the agreement. The term imposing a duty upon the Government to provide a police guard is not a term necessary for carrying out the terms of the contract. Ordinarily, the contractor has to employ the persons required for carrying out his obligations under the contract unless there is a terms to the contrary. In the absence of any such term, in the circumstances of the case it is not possible to accept this contention. 11. Lastly, it was argued that clauses 21 and 22 of the contract provided for the prosecution of the persons avoiding the payment of octroi duty and that though the appellants prosecuted such delinquents, the Magistrate dismissed the complaints on the ground that they were not sustainable in law; and that, therefore, the Government by introducing such illegal terms in the contract caused loss to the appellants as it became impossible for them to prevent evasion of the payment of octroi duty. This argument is based upon a misconception of the scope of clauses 21 and 22 of the contract, which read: "21. In case of violation of the terms of Patta the contractor personally and his employee who is responsible for it, shall be liable to punishment. The Council of Chamba is also entitled to re-auction the contract and to recover the amount of loss from the former contractor. 22. All the abovementioned offences are bailable and on the establishment of offences, the offenders shall be punishable with either of sentences. The sentence of imprisonment can be for a period of one year and the sentence of fine to the extent of Rs. 1000 or both the sentences can be imposed." The offences mentioned are the violation of the terms of the contract by the contractor or his employee. The sentence of imprisonment can be for a period of one year and the sentence of fine to the extent of Rs. 1000 or both the sentences can be imposed." The offences mentioned are the violation of the terms of the contract by the contractor or his employee. Clause 22 has nothing to do with the non-payment of octroi duty by a person who brought goods into the Chamba town area: that situation is governed by clause 3 of the contract, which reads: "A. If any person, with a view to fraudulently avoid payment of octroi duty, secretly sells any goods and does not pay octroi, or if he brings a letter from the toll clerk of the contractor relating to goods and does not take it to the octroi post within 5 days or if he raises a quarrel or a dispute, and B. if the contractor of the Ahrat khana does not pay octroi duty on any goods within 4 days of their sale, the fact should at once be reported to the District Magistrate whose decision shall be final. But this decision shall not be a bar to a civil suit if the (objector-party) contestant wants to have his case decided by a civil court. And in case of cheating or any other offence, the District Magistrate would be competent to order the registration of criminal case against the defaulter (guilty person).' 12. If a person did not pay the octroi duty, the dispute was to be referred to the District Magistrate whose decision would be final, but that did not preclude the contractor from taking necessary action in a civil court. In this case the appellants did not refer the dispute to the District Magistrate under clause 3(A) and (B) but proceeded to prosecute them under clause 22 and the complaint was rightly dismissed by the Magistrate as not maintainable under law. There are no merits in this contention either. 13. No other point was raised. In the result the appeal fails and is dismissed. Though we have held that the appellants did not prove that any damage was caused to them, the foregoing discussion discloses that the action of the Government, although taken in the interests of the public, did put obstacles in the way of the contractor collecting his levy of octroi duty under the contract. Though we have held that the appellants did not prove that any damage was caused to them, the foregoing discussion discloses that the action of the Government, although taken in the interests of the public, did put obstacles in the way of the contractor collecting his levy of octroi duty under the contract. We, therefore, direct the parties to bear their respective costs in this Court.