B. D. Naithani v. State of U. P. — 1966 DIGILAW 127 (ALL)

JUDGMENT :- This is defendant's appeal. The suit giving rise to the present second appeal was filed by the State of Uttar Pradesh against the defendant-appellant for recovery of a sum of Rs. 2,700. 2. The plaintiff's case was that the; plaintiff carried on transport business under the name and style of U.P. Government Roadways throughout the State of Uttar Pradesh; the defendant was an Army Service Corps Contractor in the year 1950; the defendant as such had to supply all types of transport to the Military Officers at Dehradun; that there was a contract between the plaintiff and the defendant, whereby the defendant used to secure vehicles from the plaintiff-appellant from time to time to fulfil his obligation to supply transport vehicles to the Army Service Corps; the defendant had undertaken to pay the hire charges to the plaintiff for the same. From 28th April 1950 to 26th September, 1950, the plaintiff supplied to the defendant transport vehicles for the use of the Military Officers on different dates and a sum of Rs. 6,223-11-9 became due to the plaintiff from the defendant on account of the said hire charges. The plaintiff, however, filed suit for recovery of Rs. 2,700 only. 3. The suit was contested by the defendant. It was admitted by the defendant in his written statement that the plaintiff did carry on transport business under the name and style of the U.P. Government Roadways. It was also admitted by the defendant that he was a Military Contractor. The defendant, however, alleged that there was no privity of contract between the plaintiff and the defendant and that the plaintiff really had supplied trucks and taxis directly to the Military Authorities and that the obligation to pay the hire charges, therefore, was on the Military Authorities. 4. The trial Court arrived at the conclusion that there was no contract between the plaintiff and the defendant. On such finding, the trial Court dismissed the plaintiff's suit. 5. The plaintiff filed an appeal before the lower appellate court. The lower appellate court allowed the appeal and set aside the decision of the trial Court. It decreed the plaintiff's suit for recovery of Rs. 2,700 with costs against the defendant. 6. On such finding, the trial Court dismissed the plaintiff's suit. 5. The plaintiff filed an appeal before the lower appellate court. The lower appellate court allowed the appeal and set aside the decision of the trial Court. It decreed the plaintiff's suit for recovery of Rs. 2,700 with costs against the defendant. 6. It has been observed by the lower appellate court in its judgment that the only question for decision in the appeal before it, was whether there was any contract between the plaintiff and the defendant, by which the defendant had agreed to pay the hire charges of the truck and taxis supplied by the plaintiff. The lower appellate court arrived at the conclusion that there was a contract between the parties as alleged by the plaintiff and that the plaintiff was entitled to recover the amount claimed in the suit. It was not disputed by the defendant that the plaintiff carried on the business of transport and that the defendant was a Military contractor, and as such it was for the defendant to supply vehicles to the Military Authorities during the relevant period. It also appears that the counsel for the defendant conceded that the sum due in respect of hire charges was Rs. 2,700. In order to establish the contract set up by the plaintiff, the plaintiff examined one Ram Saran (P.W. 1) who was the Senior Station Incharge from 1950 to 1955 at Dehradun. This witness had clearly corroborated the plaintiff's case. It does not appear that any attempt at all was made on behalf of the defendant to challenge the statement of this witness on the crucial point. On the other hand, the defendant himself had admitted that he had some talk with Sri Ram Saran about the supply of trucks and taxis to the Military Authorities. By the statement of Ram Saran, it is established that the plaintiff had to supply trucks and taxis to the Military Authorities and the hire charges were to be paid to the plaintiff from the account of the defendant and that the defendant would be responsible for the payment of the hire charges to the plaintiff. By the statement of Ram Saran, it is established that the plaintiff had to supply trucks and taxis to the Military Authorities and the hire charges were to be paid to the plaintiff from the account of the defendant and that the defendant would be responsible for the payment of the hire charges to the plaintiff. In fact at one stage, the defendant admitted that it had been agreed upon between him and Sri Ram Saran that trucks and taxis would be supplied by the U.P. Government Roadways and that payment of the hire charges for the same would be made out of defendant's bills by the Military Authorities. At another place, it was further admitted by the defendant that he submitted bills of the U.P. Government Roadways to the Controller of Defence Account. The statement of the defendant itself, therefore, is consistent with the case of the plaintiff. The defendant also admitted in his cross-examination that the U.P. Government Roadways itself did not have any contract for the supply of trucks and taxis to the Military, and that, it was he, who had entered into such a contract. The lower appellate court has referred to the various letters which have been filed in this case and has ultimately arrived at the finding, that it bad been satisfactorily proved on behalf of the plaintiff, that there was a contract between the parties as alleged by the plaintiff. The finding arrived at by the lower appellate court is the only possible finding to arrive at, on the evidence and materials in this case. Apart from that, the finding is clearly a finding of fact binding on me in second appeal. 7. It appears it was urged before the lower appellate court that in view of Art. 299 of the Constitution of India, the possibility of their being an oral contract between the parties was ruled out. So far as this particular aspect of the case is concerned, the lower appellate court took the view that Art. 299(1) of the Constitution of India did not apply to cases where the commercial activities of the State were in question. The said Article, according to the lower appellate court applied only to contracts executed in the exercise of the executive powers of the State. The running of the Roadways according to the lower appellate court, was not an executive function of the State. The said Article, according to the lower appellate court applied only to contracts executed in the exercise of the executive powers of the State. The running of the Roadways according to the lower appellate court, was not an executive function of the State. The lower appellate court, therefore, repelled the contention made on behalf of the defendant with regard to the validity of the contract. 8. In second appeal, it has again been urged before me that there could be no oral contract between the parties in view of Art. 299(1) of the Constitution of India. The fact is that there was a contract between the parties as alleged by the plaintiff. It has been found as a fact that trucks and taxis were supplied by the U.P. Roadways for the use of Military personnel to enable the defendant to fulfil his obligation as a Military contractor for that purpose during that period. It is also not in dispute now that a sum of Rs. 2,700 is due on account of hire charges. In view of above circumstances, the question whether the alleged contract complies with the requirements of Art. 299(1) of the Constitution, or not, is a question of academic interest only. It has been repeatedly held by the Supreme Court that when a contract to which the State is a party, has been acted upon and benefit derived under it, the claimant is entitled to recover his dues under S. 70 or 65 of the Indian Contract Act as the case may be, though the contract did not conform to the requirements of S. 175 of the Government of India Act or Art. 299(1) of the Constitution of India. The learned counsel for the appellant, however, contended that it has not been proved that the bills of the defendant have been paid up by the Military Authorities. Consequently, it is not a case where it could be said that the defendant had derived actual benefit or advantage under the contract. On such premises, the learned counsel for the appellant urged, that the plaintiff was not entitled to recover the hire charges from the defendant. According to the learned counsel, neither S. 65 nor S. 70 of the Indian Contract Act could be applicable. I am, however, unable to agree with the aforesaid contention. On such premises, the learned counsel for the appellant urged, that the plaintiff was not entitled to recover the hire charges from the defendant. According to the learned counsel, neither S. 65 nor S. 70 of the Indian Contract Act could be applicable. I am, however, unable to agree with the aforesaid contention. It is wholly immaterial whether the bills of the defendant had been actually paid by the Military Authorities or not. The benefit and advantage derived by the defendant under the contract with the plaintiff was, that the transport vehicles belonging to the plaintiff were supplied to the defendant and the defendant made use of such vehicles with a view to discharge his contractual obligation to the Military Authorities. This consideration alone establishes that advantage and benefit had been received by the defendant under his contract with the plaintiff and Ss. 65 and 70 would be applicable. In New Marine Coal Co. Ltd. v. Union of India, AIR 1964 SC 152 after reference to the previous decision of the Supreme Court to the same effect, their Lordships laid down that if in pursuance of void contract, one party to that contract had performed his part and the other had received benefit of the performance of the contract by such party S. 70 of the Indian Contract Act would justify the claim made by such party against the other. 9. So far as the view of the lower appellate court, that the Transport business carried on by the State was a commercial activity to which Art. 299(1) did not apply, is concerned, I am unable to agree with it. I am of the opinion that the commercial activity of the present nature is also an activity of the State in exercise of its executive power. That this is so, appears to be clear from a perusal of Art. 298 of the Constitution of India. In fact, the learned counsel for the respondent could not support the view of the lower appellate court on this point. 10. The learned counsel for the appellant further urged that the Station Incharge Roadways, Dehradun could not enter into a contract so as to bind the State. That is to say, he did not have authority to enter into a contract on behalf of the State. 10. The learned counsel for the appellant further urged that the Station Incharge Roadways, Dehradun could not enter into a contract so as to bind the State. That is to say, he did not have authority to enter into a contract on behalf of the State. No such specific plea was taken by the defendant in his written statement, and the defendant has not adduced any evidence to establish the plea of absence of authority. It was clearly upon the defendant to prove that the officer who entered into a contract did not have authority to do so. In the absence of any evidence to that effect, it must be presumed that the contract was entered into in a regular manner. 11. In view of my finding that the plaintiff is entitled to recover the amount from the defendant, the appeal fails. 12. I, accordingly, dismiss the appeal with costs. Appeal dismissed.