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Himachal Pradesh High Court · body

2001 DIGILAW 89 (HP)

STATE OF HIMACHAL PRADESH v. ASIA RESORTS LTD.

2001-05-15

R.L.KHURANA

body2001
JUDGMENT R.L. Khurana, J.—The defendant No. 1 Messrs Asia Resorts Ltd., is a public limited company duly incorporated under the provisions of the Companies Act, 1956. It is running a tourist resort/Hotel at Parwanoo under the name of "Timber Trail". It has installed a rope way from its Hotel premises at Parwanoo to a place known as Banasar for the purpose of its business for carrying tourists. It is charging Rs. 35 per passenger 2. On 13.10.1992 an accident took place on such ropeway. The haulage rope of the cable car got snapped as a result one cable car got strucked midway hanging on the track rope. There were twelve persons in the cable car. Two of such persons in panic had jumped out of the cable car. Others remained hanging in the cable car. Rescue efforts made by the defendant No.1 failed. On coming to know about the accident the district authorities rushed to the spot. Rescue operations were discussed with the Managing Director of the defendant No. 1, when it was decided to take the services of the Air Force. Defendant No. 1 gave an undertaking in writing to bear all the charges of the rescue operation to be conducted by the Air Force or any other authority. On such undertaking given by defendant No. 1, services of Air Force were requisitioned by the plaintiff to save the precious human lives. Helicopters of the Ministry of Defence were deployed and the passengers stranded in the cable car were saved after a great struggle. In such rescue operation, the plaintiff had to bear an expenditure of Rs. 7,98,353. The defendant No. 1 is liable to pay such amount to the plaintiff, as per the undertaking given by it on 13.10.1992. The defendant No. 1 was called upon to pay the amount. Since the amount was not paid, the present suit came to be filed for the recovery of Rs. 7,98,353. 3. The suit is being resisted and contested by the defendant No. 1. The accident was admitted. It was also admitted that out of the twelve passengers in the cable car, two had jumped out. It has been pleaded that the accident was not as a result of negligence on the part of the defendant No. 1. 7,98,353. 3. The suit is being resisted and contested by the defendant No. 1. The accident was admitted. It was also admitted that out of the twelve passengers in the cable car, two had jumped out. It has been pleaded that the accident was not as a result of negligence on the part of the defendant No. 1. It was further pleaded that the track rope on which the cable car was stranded had sufficient strength to bear the load and there was no danger to the lives of the passengers. Various options and methods could be pressed into service to move the cable car and to rescue the passengers. The defendant No. 1 was not allowed to carry out its rescue operations. Deployment of helicopters was not denied. It was pleaded that deployment of helicopters was at the instance of the plaintiff itself. No request was made by the defendant No. 1 to the District Administration for carrying out the rescue operations Nor any undertaking was given. The undertaking was obtained under undue influence and as such the same is neither binding nor enforceable. That the alleged undertaking was got signed from the Managing Director of defendant No.1 under threat and force since a criminal case stood registered against the defendant No. 1 in respect of the cable car accident. It was also pleaded that there is no privity of contract between the parties and that the contract, if any, is void since the same has not been entered into in accordance with the provisions contained in Article 299 of the Constitution of India. The defendant No.1 further averred that the ropeway stood insured with the National Insurance Company, who is a necessary party. Since the plaintiff has failed to join such Insurance Company as a party to the suit, the same is bad for non-joinder of a necessary party Objections as to estoppel and want of notice under Section 80, Code of Civil Procedure insofar as defendant No.2 is concerned, were also raised. 4. Following issues were framed on 26.6.1997 on the basis of the pleadings of the parties: 1. Whether the defendant No. 1 undertook to bear the cost rescue operation, as alleged? OPP 2. If Issue No. 1 is proved in affirmative, to what amount the plaintiff is entitled and from whom? OPP 3. 4. Following issues were framed on 26.6.1997 on the basis of the pleadings of the parties: 1. Whether the defendant No. 1 undertook to bear the cost rescue operation, as alleged? OPP 2. If Issue No. 1 is proved in affirmative, to what amount the plaintiff is entitled and from whom? OPP 3. Whether there is no privity of contract between the plaintiff and defendant No. 1, as alleged? OPD 1 4. If issue No. 3 is not proved, whether the contract is neither legal nor enforceable being hit by Article 299 of Constitution of India, if so, its effect? OPD 1 5. Whether the undertaking of defendant No. 1 has been procured under threats, if so, its effect? OPD 1 6. Whether the suit is bad for non-joinder of National Insurance Company, if so, its effect? OPD 1 7. Whether defendant No. 1, has not been sued properly, as alleged, if so, its effect? OPD 1 8. Whether the plaintiff is estopped to file the suit on account of its acts, deeds, conduct and acquiescence, if so, its effect? OPD1 9. Whether the suit is bad for want of notice under Section 80 of the Code of Civil Procedure, if so, to what effect? OPD 1 10. Relief. 5. I have heard Shri M.C. Mandhotra, the learned Additional Advocate General for the plaintiff and Shri Dinesh Sharma, Advocate, the learned Counsel for defendant No. 1 and have also gone through the record of the case. My findings on the above issues are as under: Issues No.1 and 5. 6. Both these issues being co-related and inter-connected are being taken up together. 7. Ex. PW 2/A is the letter dated 13.10.1992 whereby the defendant No.1 is alleged to have given the undertaking to bear the expenditure involved in carrying out the rescue operations. The letter reads: "Ref. No. ARL/92/1899 Dated 13th October, 1992. The SDM Solan District, SOLAN. Sub:—Accident of Cable Car. Dear Sir, At 4 p.m. my technician reported me that the haulage rope of the Cable Car has snapped and one of the Cable Car hanging on track rope about 500 meters from the lower station. There were 12 persons in Cable Car, but the one attendant and one person jumped down from the Cable Car while coming out as the Cable Car reached the upper station. The exact reason of the accident is no none at present. There were 12 persons in Cable Car, but the one attendant and one person jumped down from the Cable Car while coming out as the Cable Car reached the upper station. The exact reason of the accident is no none at present. For rescue of the passengers, we are in touch with the State Government as well as Air Force Station Chandigarh. We hope that the passengers will be rescued with the help of the Helicopter. We hereby undertake that the cost of the rescue operation if any charged by the Air Force or any other department will be borne by us. Yours faithfully For ASIA RESORTS LTD., Sd/- (R.K. GARG) MANAGING DIRECTOR". Admittedly, Ex. PW 2/A is signed by the Managing Director of Defendant No. 1. 8. The defendant No. 1 in para 4 of its written statement, has averred with regard to Ex. PW 2/A, as under : "That contents of para 4 as represented are false hence denied. It is denied that M/s. Asia Resorts Ltd. failed to rescue the passengers stranded the cable car and on receipt of said information District Administration rushed to the spot. After the accident immediate information was given to the police of Police Station Parwanoo, the police personnels reached on spot immediately and thereafter police official sent a "Ruka" from the spot for registration of case against various persons including the then Managing Director of M/s. Asia Resorts Limited. It is denied that the matter was discussed by the District authorities with the Managing Director as alleged, the plaintiff has not intentionally given the name of such officers, who discussed the matter. However, the Sub Divisional Magistrate, Solan, Deputy Superintendent of Police Parwanoo and some other police officials inquired about the steps being taken by the Defendant No.1 to bring cable car on the lower platform, the officials of M/s. Asia Resorts Limited informed the said officials that the management is trying to rescue the passengers either through emergency trolley or fix haulage rope from upper station to the cable car, so that the cable car can be brought on the lower platform. The Sub Divisional Magistrate and police officials started terrorising, threatening and humiliating Sh. R.K. Garg and other members of the management of M/s. Asia Resorts Ltd., so much so threat to arrest and put majority of management behind the bars was given. The Sub Divisional Magistrate and police officials started terrorising, threatening and humiliating Sh. R.K. Garg and other members of the management of M/s. Asia Resorts Ltd., so much so threat to arrest and put majority of management behind the bars was given. The officers of District Administration and Police were further prompted by certain person, who were having strained relations with Sh. R.K. Garg due to political differences or other factors, to terrorise and humiliate the entire management of M/s. Asia Resorts Limited. After manipulating facts, men and circumstances, Sh. R.K Garg, the then Managing Director of M/s. Asia Resorts Limited was made to sign writing dated 13.10.1992 by Sub Divisional Magistrate and Police Officials. The said writing is result of undue influence and as such has no force in the eyes of law. The letter No. ARL/92/1899 dated 13.10.1992 is an illegal document, having no force in the eyes of law and as such does not provide any base for action against Defendant No. 1. The police personnels procured letter head of defendant No. 1 and thereafter without the knowledge and consent of the defendant No.1 got said letter typed and thereafter under threat and force procured signatures of Sh. R.K. Garg on the same......" 9. Shri R.K. Garg, the Chairman of the defendant No. 1, while appearing as DW 3 has deposed with regard to Ex. PW 2/A in the following terms: "A criminal case was registered against me and my employees. During the investigation of such case, the Station House Officer, Police Station, Parwanoo, brought letter Ex. PW 2/A and asked me to sign the same. I refused to sign the same and I told him that I would carry out the rescue operation. I was threatened by the Station House Officer that since the decision has been taken by the higher officers and in case I do not sign the letter, there would be serious consequences thereof. Since I was nervous I signed the letter." 10. DW 1 Shri D.P. Kainth, Vice President of the defendant No.1 has stated with regard to Ex. PW 2/A, as under : "A criminal case was registered by the police in which I was one of the accused. Station House Officer of Police Station, Parwanoo was at the spot. He started with the investigation of the case. DW 1 Shri D.P. Kainth, Vice President of the defendant No.1 has stated with regard to Ex. PW 2/A, as under : "A criminal case was registered by the police in which I was one of the accused. Station House Officer of Police Station, Parwanoo was at the spot. He started with the investigation of the case. Shri R.K. Garg, the then Managing Director and 2/3 members of the staff were also impleaded as accused in the case. At about 7.00 p.m. the Station House Officer came with a letter and asked Shri R.K. Garg to sign the same. Shri Garg refused to sign the letter. The Station House Officer thereafter threatened that he knew how to obtain the signatures. Ex. PW 2/A is the letter which was got signed from Shri Garg by the Station House Officer.” 11. The oral evidence of DW 1 and DW 3 is to the effect that threats were advanced by the Station House Officer, Parwanoo. This evidence is contrary to the pleadings contained in para 4 of the written statement wherein the specific pleadings are that threats were advanced by the Sub Divisional Magistrate and Police Officials. 12. DW 2 Shri Bhag Singh was the Station House Officer of Police Station, Parwanoo at the relevant time. He has deposed : "I had carried out the investigation of the cable car accident. I reached the spot on 13.10.1992. Deputy Superintendent of Police, Sub Divisional Magistrate and Deputy Inspector General were present. Superintendent of Police was also present. Letter Ex. PW 2/A was handed over to me by the Superintendent of Police for obtaining the signatures of Shri R.K. Garg, Shri R.K. Garg told me that he is having the rescue operation and that no help was required. I told Shri Garg that once it has been ordered by the superior officers, he should sign it whereupon Shri Garg had signed it." 13. Even if the evidence of DW 2 is accepted on its face value, there is nothing in his statement to show that any threats were advanced for obtaining the signatures of Shri R.K. Garg, Managing Director of defendant No. 1. 14. There is no denying that the letter Ex. PW 2/A is typed on the letter-head of defendant No. 1. It also contains a reference number as "Ref No. ARL/92/1899". 14. There is no denying that the letter Ex. PW 2/A is typed on the letter-head of defendant No. 1. It also contains a reference number as "Ref No. ARL/92/1899". It is not the case of defendant No.1 that the reference number mentioned in Ex. PW 2/A is false and fictitious and that no such reference number is being used by defendant No. 1. No evidence is also forthcoming as to how the letter Ex. PW 2/A has come to be typed on the letter-head of defendant No. 1 if the same was not typed in the office of defendant No. I by any of his employee. 15. No complaint appears to have been made by defendant No. 1 at any stage prior to the present suit about the signatures of Shri R.K. Garg having been obtained under threat. 16. Ex. PW 3/A is the letter dated 19.10.1992 which is admitted to have been written by defendant No.1 to the Deputy Commissioner, Solan, conveying its thanks for the help rendered during the rescue operation. The letter reads: "Dear Madam, I must thank you for the timely and valuable help rendered by you during rope-way rescue operation on 14th and 15th October, 1992. The operation conducted has been completed successfully by the grace of the Almighty and with the help of the Air Force and Army. Myself, my family members and staff shall always remain grateful to you. Yours faithfully, For Asia Resorts Ltd., Sd/- (R.K. Garg), Managing Director." 17. Had the help in rescue operation not been rendered by the District Administration on the request of the defendant No.1 and had the letter Ex, PW 2/A been obtained from the defendant No.1 under threat, there would not have been any occasion for defendant No. 1 to address a letter like Ex. PW 3/A. On the other hand, the defendant No. 1 would have lodged a protest to the District Administration pointing out that the help in carrying out the rescue operations was not at its instance and also that the letter Ex. PW 2/A was got signed under threat. 18. The letter Ex. PW 3/A destroys the case set up by the defendant No.1 and the only conclusion is that defendant No. 1 had undertaken to bear the cost of rescue operation and that such undertaking was not obtained under threats. PW 2/A was got signed under threat. 18. The letter Ex. PW 3/A destroys the case set up by the defendant No.1 and the only conclusion is that defendant No. 1 had undertaken to bear the cost of rescue operation and that such undertaking was not obtained under threats. Issue No. 1 is accordingly decided in favour of the plaintiff while issue No. 5 is decided against defendant No. 1. Issue Nos. 3 and 4. 19. The plaintiff is seeking the recovery of the amount on the basis of the undertaking Ex. PW 2/A given by the defendant No. 1. It is pleaded by defendant No. 1 that there is no privity of contract between the parties and that if there is any contract, the same is neither legal nor enforceable being hit by Article 299 of the Constitution of India. 20. The undertaking Ex. PW 2/A cannot be termed as a contract between the parties. Therefore, Article 299, Constitution of India has no application. The plaintiff is seeking to enforce the undertaking of defendant No. 1. No contract is sought to be enforced. 21. Even if it be assumed that letter/undertaking Ex. PW 2/A is a contract, the same is void being in contravention of Article 299 of the Constitution of India. The plaintiff can still recover the amount under Sections 65 and 70 of the Contract Act, 1872. Section 65, Contract Act, 1872, provides: "Obligation of person who has received advantage under void agreement, or contract that becomes void.—When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received it." 22. The defendant No. 1 admittedly had derived an advantage under such void contract inasmuch as he had enjoyed the fruits of the rescue operation. Therefore, the defendant No.1 is bound under the law to compensate the plaintiff for the advantage received by it. 23. The defendant No. 1 admittedly had derived an advantage under such void contract inasmuch as he had enjoyed the fruits of the rescue operation. Therefore, the defendant No.1 is bound under the law to compensate the plaintiff for the advantage received by it. 23. A Full Bench of the Kerala High Court in A.K.T.K.M. Sankaran Namboodiripad and others v. State of Kerala, AIR 1963 Kerala 278, has held that under Section 65, Contract Act, when an agreement is discovered to be void, any person, who has received an advantage under such agreement, is bound to restore it or to make compensation for it to the person from whom he received it. 24. In State of Orissa v. Rajballav Misra, AIR 1976 Orissa 19, a contractor had entered into an agreement with the Government to construct a go down. He also received advance payment for the same. He did not complete the work. The Government determined the contract and filed a suit for the realisation of the amounts advanced. The contractor raised the plea that the agreement was void being not in conformity of Article 299, Constitution of India. It was held that though the contract not being in conformity with Article 299, Constitution of India was void from its inception, the Government under Section 65, Contract Act, could recover the amount advanced to the contractor under the contract. 25. A Division Bench of the Assam High Court in Dharameswar Kalita v. Union of India and another, AIR 1955 Assam 86, while taking a similar view, has further held that granting of relief under Section 65 of the Contract Act does not amount to an indirect contravention of the pro visions of Article 299, Constitution of India, inasmuch as relief under Section 65, Contract Act, is specifically granted on the basis that the contract is void and there is no attempt to enforce it as such. 26. Section 70, Contract Act 1872, further provides : "Obligation of person enjoying benefit of non-gratuitous act.—Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered." 27. The Honble Supreme Court in Mulamchand v. State of Madhya Pradesh, AIR 1968 SC 1218, has held that Section 70, Contract Act, applies to contracts with the Government which are found to be unenforceable on account of non-compliance with the prescribed formalities laid down in Article 299 of the Constitution of India. 28. In State of Madhya Pradesh v. Jhankar Singh, AIR 1973 MP 274, has held that where an agreement does not comply with the requirement of Article 299, Constitution of India, the party to the contract is entitled to relief under Section 70, Contract Act, if the three conditions mentioned in the section are satisfied. 29. The three conditions laid down in Section 70, area:— (a) the person must have done the thing lawfully; (b) he must not have intended to do so gratuitously; and (c) the other person must have enjoyed the benefit. 30. In Union of India and another v. Sahab Singh, AIR 1977 Allahabad 277, it has been held that where a contract is not in accordance with Article 299 (1), Constitution of India, but the benefits thereunder are accepted, it is a situation to which Section 70 of the Contract Act is applicable. Even though no alternative case was set up in the plaint entitling the plaintiff to get compensation under Section 70 of the Contract Act, still the plaintiff cannot be non-suited on the said ground if from the record it was clear that he was entitled to the benefit of the said provision. 31. I am in full agreement with the above principle which is applicable to the present case. The three conditions laid down in Section 70, Contract Act, are fully satisfied in the present case. The plaintiff acted in a lawful manner in deploying the services of Air Force Helicopters and it did not acted in a gratuitous manner. The defendant No. 1 is also shown to have derived benefit thereof. Therefore, even if it be assumed that the contract between the parties is void, the plaintiff is entitled to the amount under Sections 65 and 70 of the Contract Act, 1872. The two issues are accordingly decided. Issue No. 2. 32. Ex. PW 4/B is the statement of account sent by the Air Force authorities to the plaintiff in respect of the amounts payable by the plaintiff for the use of helicopters for the period 14.10.1992 to 15.10.1992. The two issues are accordingly decided. Issue No. 2. 32. Ex. PW 4/B is the statement of account sent by the Air Force authorities to the plaintiff in respect of the amounts payable by the plaintiff for the use of helicopters for the period 14.10.1992 to 15.10.1992. A total amount of Rs. 7,98,353 is shown payable by the plaintiff to the Air Force Authorities towards the rescue operation conducted on 14/15.10.1992. This amount was paid by the plaintiff into the account of the Air Force Authorities on 18.12.1993. Therefore, the plaintiff is entitled to recover this amount from the defendant No. 1. The issue is decided in favour of the plaintiff. Issue No. 6. 33. Even if it be assumed that the ropeway at the relevant time was covered by an insurance policy, the Insurance Company is not a necessary party. The plaintiff is not a party to such insurance There is no privity of contract with the plaintiff. It is a matter between the defendant No. 1 and the Insurance Company. The defendant No. 1 may claim the amount from the Insurance Company, if covered under the insurance policy The present suit is not bad for non-joinder of the Insurance Company The issue is decided against the defendant No. 1. Issue No. 7. 34. The defendant No. 1 has been sued through its Managing Director Shri R.K. Garg. It is contended that Shri R.K. Garg was not the Managing Director on the date of suit and as such defendant No. 1 has not been sued properly. 35. Even if Shri R.K. Garg was not the Managing Director of defendant No. 1 as on the date of suit, he was and is the Chairman of defendant No.1 , as stated by him while appearing as DW 3. 36. Even otherwise, a company can be sued through its Managing Director without infact giving the name of such Managing Director. Therefore, mentioning of a wrong name as Managing Director in the present case is not material, since the defendant No.1 has put in appearance to contest the suit through its actual Managing Director. The issue is decided against the defendant No. 1. Issue No. 8. 37. No evidence has been led to show as to how the plaintiff is estopped by its acts, deeds, conduct and acquiescence to file the present suit. The issue is accordingly decided against defendant No. 1. The issue is decided against the defendant No. 1. Issue No. 8. 37. No evidence has been led to show as to how the plaintiff is estopped by its acts, deeds, conduct and acquiescence to file the present suit. The issue is accordingly decided against defendant No. 1. Issue No. 9. 38. The Controller of Defence Accounts (AF) Dehradun, has been impleaded as a proforma defendant No. 2 in the present suit. No relief has been claimed against defendant No. 2. Admittedly, no notice under Section 80, Code of Civil Procedure, is shown to have been issued to defendant No.2 by the plaintiff. The learned Counsel for the defendant No. 1 has contended that the suit would be bad for want of notice. 39. The defendant No. 1 is not entitled to a notice under Section 80, Code of Civil Procedure. Therefore, assuming that the suit as against defendant No. 2 is bad for want of notice under Section 80, Code of Civil Procedure, the same would not render the suit bad as against defendant No. 1 as well. Defendant No. 2 is neither a proper nor a necessary party to the suit. The suit would be competent and an enforceable decree can be passed against defendant No.1 even without defendant No.2 being a party to the suit. Therefore, absence of notice to defendant No. 2 will have no effect in so far as defendant No. 1 is concerned- The issue is accordingly decided. Relief. 40. As a result of the above findings, a decree for a sum of Rs. 7,98,353 with costs is passed in favour of the plaintiff and against the defendant No. 1. The plaintiff shall further be entitled to interest, under Section 34, Code of Civil Procedure, on the decretal amount of Rs. 7,98,353 at the rate of 6% per annum from the date of suit, that is, 31.3.1995 till the date of payment/realisation of the amount. Petition dismissed. -