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Himachal Pradesh High Court · body

1997 DIGILAW 413 (HP)

STATE OF HIMACHAL PRADESH v. HIMACHAL RANG UDYOG

1997-11-25

R.L.KHURANA

body1997
JUDGMENT R.L. KHURANA, J.—The present suit has been filed by the two plaintiffs for the recovery of Rs. 6,27,143.81 p. detailed as under:— (a) Amount due to non-payment of bills for the supply resin and turpentine. Rs. 1,70,128.66 p. (b) Interest on such amount at the rate of 18 per cent per annum from 29.3.1974 to 30.6.1988 (the date of suit.) Rs. 4,36,786.OOp. (c) Amount due on account of sales-tax at the rate of 6 per annum due to non-receipt of D1 forms. Rs. 10,382.40 p. (d) Interest on the amount of sales-tax at the rate of 18% per annum. Rs. 14,950.75 p. Total Rs. 6,27,143.81 p. The plaintiff No. 1 is the State of Himachal Pradesh. While plaintiff No. 2 is the Himachal Pradesh State Forest Corporation. They are hereinafter being referred to as the "first plaintiff and "second plaintiff", respectively. The suit has been filed by both the plaintiffs through Managing Director of the second plaintiff. 2. The first plaintiff was running two resin and turpentine factories, respectively at Bilaspur and Nahan and was dealing in the business of resin and turpentine. The defendants had purchased resin and turpentine on 29.3.1974 vide four bills worth Rs. 1,70,128.66 p. Such amount has not been paid by the defendants inspite of repeated demands. 3. On and with effect from 1.4.1974, the first plaintiff constituted a Corporation known as Himachal Pradesh State Forest Corporation, a company registered under the Indian Companies Act, 1956, and on the creation of such Corporation, that is, the second plaintiff, the management, control and business of the two resin and turpentine factories at Bilaspur and Nahan was transferred to it vide notification No. 10-26/72-SF dated 25/26.3.1974. However, by the same notification, the first plaintiff retained the right to recover the amounts due to it from various parties till 31.3.1974. 4. A sum of Rs. 1,70,128.66p. was thus due from the defendants as on 31.3.1974. The sale of resin and turpentine was made to the defendants against D form. Since the defendant failed to supply the requisite D form in respect of the purchases made by them, they are, as such, liable to pay sales tax at the rate of 6% per annum. The outstanding amount of sales tax comes to Rs. 10,382.40p. 5. The sale of resin and turpentine was made to the defendants against D form. Since the defendant failed to supply the requisite D form in respect of the purchases made by them, they are, as such, liable to pay sales tax at the rate of 6% per annum. The outstanding amount of sales tax comes to Rs. 10,382.40p. 5. As per the custom of the trade, the plaintiffs are also entitled to interest on the outstanding amounts at the rate of 18 per cent per annum, as detailed at (b) and (d) above. 6. The suit was being initially resisted and contested by the defendants and on the pleadings of the parties, issues were framed on 29.8.1990. The plaintiffs closed their evidence in the affirmative on 28.6.1996. Thereafter, the case was being adjourned from time to time for evidence of the defendants on payment of costs and otherwise. However, neither any evidence was produced nor the costs were paid by the defendants. Ultimately, on 5.9.1997, when the case was fixed for evidence of the defendants, Shri R.L. Sood, Advocate, the learned Counsel for the defendants pleaded no instructions, since the defendants were not responding to his various communications. He was as such permitted to withdraw from the case and the defendants were ordered to be proceeded against ex-parte. 7. I have heard the learned Counsel for the plaintiffs and have gone through the record of the case. 8. As stated above, the suit has been filed by two plaintiffs, namely, State of Himachal Pradesh and Himachal Pradesh State Forest Corporation, through Shri V.P. Mohan, the then Managing Director of the H.P State Forest Corporation, the second plaintiff. 9. The first question, which arises for consideration is whether the suit on behalf of the first plaintiff, the State of Himachal Pradesh through the Managing Director of the H.P. State Forest Corporation is a properly laid suit. 10. 9. The first question, which arises for consideration is whether the suit on behalf of the first plaintiff, the State of Himachal Pradesh through the Managing Director of the H.P. State Forest Corporation is a properly laid suit. 10. Article 300(1) of the Constitution of India, provides:— "The Government of India may sue or be sued by the name of the Union of India and the Government of a State may sue or be sued by the name of the State and may, subject to any provisions which may be made by Act of Parliament or of the Legislature of such State enacted by virtue of powers conferred by this Constitution, sue or be sued in relation to their respective affairs in the like cases as the Dominion of India and the corresponding Provinces or the corresponding Indian States might have sued or been sued if this Constitution had not been enacted." Section 79, Code of Civil Procedure, also provides that in a suit by or against the Government, the authority to be named as plaintiff or defendant, as the case may be, shall be— (a) in the case of suit by or against the Central Government, the Union of India, and (b) in the case of suit by or against a State Government, the State. Article 154, Constitution of India, which deals with the executive powers of the State, provides:— "(1) The executive power of the State shall be vested in the Governor and shall be exercised by him either directly or through officers subordinate to him in accordance with this Constitution. (2) Nothing in this Article shall— (a) be deemed to transfer to the Governor any funotjons conferred by any existing law on any other authority; or (b) prevent Parliament or the Legislature of the State from conferring by law functions on any authority subordinate to the Governor." Article 166, Constitution of India, which deals with the conduct of business of the Government of a State, further provides:— (1) All executive action of the Government of a State shall be expressed to be taken in the name of the Governor. (2) Orders and other instruments made and executed in the name of the Governor shall be authenticated in such manner as may be specified in rules to be made by the Government, and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instrument made or executed by the Governor. (3) The Governor shall make rules for the more convenient transaction of the business of the Government of the State, and for the allocation amount Ministers of the said business insofar as it is not business with respect to which the Governor is by or under this Constitution required to act in his discretion." 11. A combined reading of the provisions contained in Articles 154 and 166, quoted above, shows that the executive powers vested in the Governor can be exercised either directly by himself or through officers subordinate to him in accordance with the procedure laid down in Article 166. 12. The exercise of executive power includes both the power to make a decision as well as that of crying out the decision. Therefore, a subordinate officer through whom the power is exercised is entitled to make a decision himself as to the exercise of the power, and his power is not confined merely to carrying out the order of the Governor. 13. There is no denying that the Governor of Himachal Pradesh, in exercise of the powers conferred under Article 166(3). Constitution of India, has framed rules for the transaction of business of the Government of the State. Under such rules, a suit by the State Government can be filed either through the secretary of the department concerned or the Collector of the district. 14. In the present case, the suit by the first plaintiff has been filed neither through the Secretary of the Forest Department nor through the Collector of the district concerned. It has been filed through the Managing Director of the second plaintiff. Undisputedly, under the rules of business framed under Article 166(3) of Constitution of India, the Managing Director of the State Forest Corporation has not been authorised to file the suit on behalf of the State. 15. It has been filed through the Managing Director of the second plaintiff. Undisputedly, under the rules of business framed under Article 166(3) of Constitution of India, the Managing Director of the State Forest Corporation has not been authorised to file the suit on behalf of the State. 15. The case put forth by the plaintiffs is that the Managing Director of the second plaintiff has filed the suit on behalf of the State by virtue of the General Power of Attorney, Ex. PW 1/D, executed in his favour by the Secretary (Forests) to the State Government. 16. It may not be out of place to mention that the Secretary (Forests) himself was exercising the executive functions of the State by virtue of the delegation made under the rules of business framed by the Governor under Article 166(3) of the Constitution of India. Therefore, in the absence of a specific power, the Secretary (Forests) could not have sub-delegated the powers, which were exercisable by him, to the Managing Director of the second plaintiff. The doctrine of delegates non potest delegate would be applicable. 17. Even if it be assumed that the Secretary (Forests) to the State Government had the authority to sub-delegate the powers of filing the suit on behalf of the State to any other person/officer under the rules of business of the State, the general power of attorney, Ex. PW 1/D, cannot be said to be a valid authority or sub-delegation. 18. Article 166(1) of the Constitution of India, specifically provides that ail executive actions of the Government of a State shall be exercised to be taken in the name of the Governor 19. A bare reading of the opening paragraph of Ex. PW/1D shows that the power of attorney does not appeal to have been executed on behalf of or under the orders of the Governor. Such power of attorney appears to have been executed by the Secretary (Forests) in his own personal capacity. The relevant portion of Ex. A bare reading of the opening paragraph of Ex. PW/1D shows that the power of attorney does not appeal to have been executed on behalf of or under the orders of the Governor. Such power of attorney appears to have been executed by the Secretary (Forests) in his own personal capacity. The relevant portion of Ex. PW 1/D, reads:— "......I, S.S. Sidhu, Commissioner-cum-Secretary (Forests) to the Government of Himachal Pradesh, Shimla, on behalf of the State of Himachal Pradesh in the Forest Department hereby appoint and constitute the Managing Director of the Himachal Pradesh State Forest Corporation Ltd., Shimla, my lawful attorney in my name and on my behalf to ask, demand and sue for a recovery in execution of decree or otherwise....." (Emphasis supplied) 20. The executive action of execution of genera! power of attorney, Ex. PW 1/D, having not been expressed to have been taken in the name of the Governor, the sub-delegation of power by the Secretary (Forests), vide Ex. PW 1/D, therefore, cannot be said to be valid and as such the Managing Director of the second plaintiff was not competent to file the suit on behalf of the State of Himachal Pradesh. The second question arising for determination is whether the suit by second plaintiff is competent. 21. It is the plaintiffs own case that at the time of transfer of management, control and business of the two resin and turpentine factories with effect from 1.4.1974 in favour of the second plaintiff vide notification dated 25/ 26.3.1974, the first plaintiff had retained the right to recover the dues payable to it until 31.3.1974. in other words, the right to recover the amount outstanding as on 31.3.1974, were never assigned to the second plaintiff by the first plaintiff. Therefore, the second plaintiff has not locus standi to bring the present suit in its own name to recover the outstanding amount from the defendants, which amount, admittedly, pertains to the period prior to 31.3.1974, 22. Assuming that the second plaintiff can institute the present suit, even then the suit is liable to be dismissed on the ground of limitation. Admittedly, the sale of resin and turpentine took place on 29.3.1974 and the amount became due immediately thereafter. The prescribed period of limitation for a suit to recover the outstanding amount of sale consideration is three years. The requisite period, therefore, stood expired on 29.3.1977. Admittedly, the sale of resin and turpentine took place on 29.3.1974 and the amount became due immediately thereafter. The prescribed period of limitation for a suit to recover the outstanding amount of sale consideration is three years. The requisite period, therefore, stood expired on 29.3.1977. The present suit which was filed on 7.7.1988, on face of it, is hopelessly barred by time. As a result of the above discussion and findings the present suit is dismissed with no orders as to costs. Suit dismissed. -