R. C. CHOPRA ( 1 ) THIS suit for the recovery of Rs. 6,09,960. 00 with pendente lite and future interest was filed by the deceased plaintiff alleging that he was in the trade of real estate under the name and style of M/s. Bijlani Estate Agents. His main job was to act as a broker rendering services in connection with the sale/purchase of the property. His professional charges were at the rate of 2% of the value of the property regarding sale and purchase of property and in case of hiring of the property, amount equivalent to 15 days rent from both the parties. On 7/06/1983, the defendant No. 1 issued an advertisement in Hindustan Times, New Delhi notifying its requirement of accommodation consisting of about 30,000 sq. ft. The plaintiff vide his letter dated 7/06/1983 gave details of certain properties to defendant No. 1. Vide letter dated 13/06/1983, the Deputy Director of respondent No. 1 called him to his office and discussed the matter in detail. On 11/01/1984 again, defendant No. 1 issued a similar advertisement in Times of India. The plaintiff again responded to the said advertisement and vide letter dated 11/01/1984, informed the defendant No. 1 that Delhi Development authority had constructed a huge office complex at Plot No. 9, Block No. 5, Rajendra Place, new Delhi and indicated the approximate floor wise rates of the area in the complex. He advised the defendant No. 1 to give a letter to Delhi Development Authority showing its intrest in the office accommodation in the said complex and also informed defendant No. 1 about his professional charges at the rate of 2% of the total value of the property to be purchased. It was alleged that the defendant No. 1, on the advice of the plaintiff, wrote a letter dated 20/02/1984 to DDA endorsing a copy thereof to the plaintiff for necessary action obviously with a view to enable the plaintiff to facilitate the sale of the property by DDA to defendant No. 1. The plaintiff took the letter of defendant No. 1 to DDA and handed over the same to the officer there on 21/02/1984. ( 2 ) THE plaintiff thereafter, vide his letter dated 5/03/1984, advised the Regional director of defendant No. 1 that he should seek appointment with Vice-chairman of DDA for the purchase of the property and also keep ready a sum of Rs. ( 2 ) THE plaintiff thereafter, vide his letter dated 5/03/1984, advised the Regional director of defendant No. 1 that he should seek appointment with Vice-chairman of DDA for the purchase of the property and also keep ready a sum of Rs. 2,90,00,000. 00 for payment to dda as cost of the aforesaid accommodation. The plaintiff alleged that he arranged the inspection of the building by the Regional Director of defendant No. 1 who approved the same and thereafter, a proposal was submitted by him to his headquarter but the headquarter could not take a decision immediately. The defendant No. 1 issued another advertisement dated 10/09/1984 in Hindustan Times for the purchase of accommodation to which also the plaintiff sent a response dated 19/09/1984 giving detailed information and again mooting the proposal for the purchase of the property at Rajendra place Complex. His professional charges were again reiterated. Defendant No. 1 gave a letter dated 20/09/1984 to DDA endorsing a copy thereof to the plaintiff. The plaintiff took that letter of deferent No. 1 to the office of the Vice-Chairman of the DDA and arranged a meeting between the officials of defendant No. 1 and DDA. Again inspection of the aforesaid property was done by the Regional Director with some officials of defendant no. 1. Thereafter, Director General of defendant No. 1 also inspected the said property. According to plaintiff, both these inspections were arranged by him. In the meanwhile, DDA had already sold some portion of the said property to others and ultimately DDA sold about 23,000 sq. ft. in the aforesaid building to defendant No. 1 for a price of Rs. 2,04,00,000. 00. The dispute between DDA and defendant No. 1 continued in regard to the balance area required by defendant No. 1. The plaintiff could not come to know as to how much final payment was worked out for the area sold or to be sold by DDA to defendant No. 1 and as such, could not calculate his brokerage. The DDA ultimately handed over the possession of the rest of the agreed area to defendant No. 1 on 9/03/1987 or immediately thereafter. ( 3 ) THE defendant No. 1 did not make any payment to the plaintiff towards the professional charges and as such, vide his letter dated 10/01/1987, the plaintiff raised a claim of his brokerage at the rate of 2% on Rs. 2,04,00,000. ( 3 ) THE defendant No. 1 did not make any payment to the plaintiff towards the professional charges and as such, vide his letter dated 10/01/1987, the plaintiff raised a claim of his brokerage at the rate of 2% on Rs. 2,04,00,000. 00 the amount paid by defendant No. 1 to dda towards the approximate price of the property. The defendant No. 1, however, vide its teply dated 8/05/1987 denied the claim of the plaintiff towards any professional charges alleging that the plaintiff had not rendered any assistance to defendant No. 1. The plaintiff issued a legal notice also dated 30/01/1989 demanding his professional charges but in reply, the defendant No. 1 again denied plaintiff s claim. The plaintiff has claimed a sum of rs. 4,08,000/- as the professional charges and a sum of Rs. 2,01,960. 00 as interest thereon at the rate of 18% per annum from 30/06/1987 to 28/02/1990. ( 4 ) THE defendants No. 2 to 4 were proforma defendants being the business associates of the plaintiff. No relief was claimed against them. Defendant No. 1 filed a written statement raising preliminary objections that there was no cause of action in favour of the plaintiff and the suit filed by the plaintiff was barred by time. It was also stated that the suit was bad for misjoinder of parties. On merits, defendants admitted that the plaintiff was an Estate Agent. However, it was denied that the plaintiff had rendered any assistance to defendant No. 1 or had actively participated in the deal or that he was entitled to any commission. Advertisements in the newspapers and the letters sent by the plaintiff were admitted but it was disputed that any letter was handed over to the plaintiff for taking up the matter with DDA. It was denied that the defendant Corporation had agreed to pay any commission to the plaintiff. It was submitted that the deal was negotiated and finalised directly between defendant No. 1 and dda and the plaintiff was not entitled to any commission as he had not rendered any service to them. It was denied that the plaintiff had taken part in any discussions, meetings or negotiations. It was submitted that the deal was negotiated and finalised directly between defendant No. 1 and dda and the plaintiff was not entitled to any commission as he had not rendered any service to them. It was denied that the plaintiff had taken part in any discussions, meetings or negotiations. It was also denied that the defendant No. 1 had engaged the plaintiff for arranging accommodation for its use and it was stated that there was no contract or privity of contract between plaintiff and defendant No. 1. The claim of interest was also disputed. ( 5 ) THE plaintiff filed a replication to the written statement of defendant No. 1 repudiating the pleas raised by defendant No. 1 and re-affirming the averments made in the plaint. ( 6 ) ON the pleadings of the parties, following issues were settled : 1. Whether the suit is within time? OPP 2. Whether defendants 2 and 3 are necessary and proper parties? If not, its effect? opp 3. Whether the plaintiff is entitled to recover from defendant No. 1any amount claimed in the suit? If so, what amount? OPP 4. Whether the plaintiff is entitled to claim any interest? If so, at what rate and for what period? OPP ( 7 ) IN the course of the proceedings, the plaintiff had died and as such, vide orders dated 1/12/1995, his LRs. were brought on record. In support of the case, the plaintiff examined PW-1 Mrs. Anita Sharma, daughter of the deceased plaintiff. The defendant No. 1 examined DW-1 Mr. Sunil Taneja, Deputy Director of defendant 11 No. 1 ( 8 ) I have heard learned counsel for the plaintiff. None appeared for defendant No. 1 for addressing arguments. My findings on the issue are as under: ISSUE N0. 1 ( 9 ) THE suit was filed by the plaintiff on 5/03/1990 and it was claimed to be within limitation on the ground that the cause of action for filing the suit arose in favour of the plaintiff on 9/03/1987 or immediately thereafter when the deal in regard to the purchase of property and delivery of possession was concluded between defendant No. 1 and DDA. PW-1 proved on record plaintiff s letter (Exhibit PW1/1) which contained an averment regarding brokerage. PW-1 proved on record plaintiff s letter (Exhibit PW1/1) which contained an averment regarding brokerage. According to the letter, brokerage was to be paid to plaintiff at the time of entering into agreement or taking over possession whichever was earlier. DW- 1, Deputy Director of defendant No. 1 in his cross-examination, stated that space measuring 23,200 sq. ft. was handed over to defendant No. 1 on 18/07/1985 and the remaining area was handed over on 9/03/1987. In para 7 of the plaintiff s letter (Exhibit PW-1/1) addressed to defendant No. 1 the terms regarding the charges payable to the plaintiff were enumerated as under: 7) Our professional charges shall be equal to 15 days rent of the premises you accept in case of renting and 2% (two percent) in case of outright purchase from your side which is a pre-condition and is not negotiable. The payment shall be made at the time of entering into agreement or taking over the possession of the premises whichever is earlier. The payment shall be made to us on the basis it is made to the owners proportionately or in full as the case may be. ( 10 ) IN the plaint, the plaintiff had raised a plea that the cause of action had arisen on 9/03/1987 when the possession of the remaining portion of the building was handed over to defendant No. 1 but the letter (Exhibit PW-1/1) dated 7/06/1983, which is the only letter containing a stipulation regarding the time of payment of professional charges to the plaintiff, stipulates that the payment had to be made either at the time of entering into the agreement or taking over of possession of the premises whichever is earlier. There is no evidence on record either documentary or oral, to indicate as to when the plaintiff had become entitled to receive his professional charges, if any. The stipulation contained in exhibit PW-1/1 does not help the plaintiffs case on the question of limitation in as much as although the possession of the remaining area of the building was handed over by DDA to defendant No. 1 on 9/03/1987 but the plaintiff was entitled to receive his professional charges on the date of entering into agreement or taking over the possession of the premises whichever was earlier. There is nothing on record to ?how that the agreement between DDA and defendant No. 1 was entered into after the handing over of the possession (on 9/03/1987. The testimony of DW-1 shows that final payment was made by defendant No. 1 to DDA on 21/10/1986 and about 23,200 sq. ft. space was handed over to defendant No. 1 on 18/07/1985. Exhibit DW-1/10 proved on record shows that the balance payment for the allotment of additional space was made vide demand draft dated 21/10/1986 and as such, the possession of that area was handed over on 9/03/1987. It is not at all proved on record that agreement between DDA and defendant No. 1 regarding the transfer of this property came into existence after 9/03/1987. If the agreement between defendant No. 1 and DDA had come into existence prior to this date, the cause of action in favour of the plaintiff would be prior to 9/03/1987 as stipulated in exhibit PW-1/1. It was for the plaintiff to establish on record that prior to 9/03/1987 there was no agreement between defendant No. 1 and DDA and as such the date of possession only had given rise to cause of action in his favour. Since the plaintiff has failed to prove on record the exact date on which the cause of action had arisen in his favour in terms of Exhibit PW-1/1, this Court is not in. a position to hold that the suit filed by him was within limitation. The issue, therefore, stands answered by holding that the plaintiff has failed to prove on record that the suit filed by him was within limitation. ( 11 ) THE issue stands answered accordingly. ISSUE N0. 2 ( 12 ) DEFENDANTS No. 2 and 3, impleaded in the suit were stated to be the associates of plaintiff who were to share the commission, if received from defendant No. 1. In the plaint itself, in para No. 1, it was stated that defendants No. 2 to 4 were the business associates of the plaintiff and in para No. 20, it was clarified that they were only proforma defendants and no relief was being claimed against them. It appears that defendants No. 2 to 4 were impleaded merely with a view to obviate any objection regarding their presence in the suit. It appears that defendants No. 2 to 4 were impleaded merely with a view to obviate any objection regarding their presence in the suit. Therefore, it can not be said that the defendants No. 2 and 3 were not necessary parties and by impleading them in the suit, the plaintiff had committed any irregularity or illegality. ( 13 ) THE issue stands answered accordingly. ISSUE N0. 3 ( 14 ) IN support of his claim of brokerage recoverable from defendant No. 1, the plaintiff mainly relies upon the advertisements issued by defendant No. 1 in newspapers giving details of the accommodation required by it and the letters unilaterally written by the plaintiff to defendant No. 1 giving details of various properties available in Delhi. In Exhibit PW-1/1, in para 7, the plaintiff REFERRED TO his professional charges at the rate of 2% in case of outright purchase. In Exhibits PW-1/4 and PW-1/6 also this clause was reiterated but there was never any affirmation from the side of defendant No. 1 agreeing to pay any brokerage to the plaintiff. Letters (Exhibit P-2, P-3 and P-5) issued by defendant No. 1 do indicate that defendant No. 1 was taking some help from the plaintiff in the matter of finding out office accommodation for its use but there was never a word even to say that the plaintiff would be paid anything towards his commission or brokerage. Rather in Exhibit P-6 which is dated 8/05/1987, the defendant No. 1 categorically took a stand that the deal between the defendant No. 1 and DDA was direct and the plaintiff had not rendered them any assistance and as such, there was no question of paying any commission. Therefore, there is no documentary evidence on record to suggest even that the defendant No. 1 had agreed to pay any commission or brokerage to the plaintiff. ( 15 ) THE oral evidence led by the plaintiff consists of the statement of PW-1 Mrs. Anita sharma, daughter of the deceased plaintiff who proved the correspondence between the plaintiff and defendant No. 1 and stated that her father was entitled to commission at the rate of 2%. In her cross examination, she had to admit that there was no agreement between her father and defendant No. 1. DW-1 Mr. Sunil Taneja, Dy. Anita sharma, daughter of the deceased plaintiff who proved the correspondence between the plaintiff and defendant No. 1 and stated that her father was entitled to commission at the rate of 2%. In her cross examination, she had to admit that there was no agreement between her father and defendant No. 1. DW-1 Mr. Sunil Taneja, Dy. Director, ESIC, appearing on behalf of defendant No. 1, gave details of the advertisements issued by defendant No. 1 in newspapers regarding its requirement of accommodation and stated that the defendant had not availed of the services of the plaintiff for purchase of the property. Thus, neither any documentary evidence nor any oral evidence produced in this case proves a concluded contract between the plaintiff and defendant No. 1 to establish that the plaintiff was entitled to claim 2% of the value of the property towards his professional charges from defendant No. 1 ( 16 ) THERE is one another angle to this controversy which is to be adverted to with reference to Article 299 of the Constitution of India which reads as under: ARTICLE 299 (1) All contracts made in the exercise of the executive power of the Union or of a state shall be expressed to be made by the President, or by the Governor of the state, as the case may be, and all sub contracts and all assurances of property made in the exercise of that power, shall be executed on behalf of the President or the Governor by such persons and in such manner as he may direct or authorise. (2) Neither the President nor the Governor shall be personally liable in respect of any contract or assurance made or executed for the purposes of this Constitution, or for the purposes of any enactment relating to the Government of India heretofore in force, nor shall any person making or executing any such contract or assurance on behalf of any of them be personally liable in respect thereof. ( 17 ) RATIONALE behind Article 299 of the Constitution of India is that there should be a proper procedure for contracts with the State which bind the Government otherwise there are chances of depletion of public funds by clandestine contracts entered into by public servants purportedly on behalf of the State. In "karamshi Jethabhai Somayya Vs. ( 17 ) RATIONALE behind Article 299 of the Constitution of India is that there should be a proper procedure for contracts with the State which bind the Government otherwise there are chances of depletion of public funds by clandestine contracts entered into by public servants purportedly on behalf of the State. In "karamshi Jethabhai Somayya Vs. State of Bombay (now Maharashtra)" reported in AIR 1964 Supreme Court 1714 the Apex Court clearly held that a contract by correspondence or oral contract was not binding upon the Government in as much as it was not in compliance with the provisions of Section 175 (3) of the Government of India Act, 1935. In "bhikraj Jaipuria Vs. Union of India" reported in AIR 1962 Supreme court 113 also the Apex Court held that the contract executed by a person not authorised in that behalf is not binding on the State. The Constitution Bench clearly held that in case of contracts between Government and private individuals, a formal document is necessary in terms of Section 175 (3) of the Government of India Act, 1935. In commercial contracts between private persons and State a written contract is all the more necessary to enable the state to safeguards its interests under the contract. ( 18 ) ARTICLE 299 of Constitution of India covers Union Government and State Governments, but not statutory authorities. However, the rationale and spirit of this Article must extend to statutory bodies also. Adverting to the provisions of the Employees State Insurance Act, 1948 and the Employees State Insurance Rules, 1950, it is found that defendant No. 1 is a creation of the statute in terms of Section 3 of the Act. As per rule 16 of the ESI Rules 1950, the Director General is the Chief Executive Officer of the Corporation authorised to enter into contracts on behalf of the Corporation in accordance with the Act or the rules or regulations made thereunder or on special instructions from the Corporation or the Standing Committee. Rule 25 speaks of acquisition of property for the purposes of the Act on behalf of the corporation and says that the Director General with the sanction of the Standing Committee may obtain any property on lease for a term exceeding 12 months. In this case also, the property was obtained from DDA on lease hold basis. Rule 25 speaks of acquisition of property for the purposes of the Act on behalf of the corporation and says that the Director General with the sanction of the Standing Committee may obtain any property on lease for a term exceeding 12 months. In this case also, the property was obtained from DDA on lease hold basis. Rule 29 (2) of the ESI Rules, 1950 lays down that every contract made under or for any purposes of the Act, shall be made on behalf of the Corporation by the Director General or subject to such conditions as may be specified by such Member or Officer of the Corporation as it may authorise provided that prior sanction of the Standing Committee is obtained in respect of any contract involving an expenditure exceeding Rs. 5,00,000. 00. ( 19 ) IN the present case, though Article 299 of the Constitution of India does not directly come into play as defendant No. 1 is neither Union Govt. nor Govt. of a State but it being a statutory authority constituted under the statute is also bound by the basic principle that the contracts with the Government have to be in writing. It has to further abide by its own rules and regulations. There is nothing on record to show that any contract was entered into by some authorized officer of defendant No. 1 with plaintiff nor there is any formal deed of contract. It is also not proved by plaintiff that any person authorised under the Act had agreed to pay 2% brokerage or commission on account of the deal in question. ( 20 ) THE evidence on record does not establish that there was any concluded contract between plaintiff and defendant No. 1 for payment of any brokerage or commission to plaintiff. Therefore, this Court has no hesitation in coming to the conclusion that the plaintiff has miserably failed to prove on record that the plaintiff is entitled to recover from defendant no. 1 any amount on account of its brokerage/commission as claimed in the suit. ( 21 ) THE issue stands disposed of accordingly. ISSUE N0. 4 ( 22 ) IN view of the decision of Issue No. 3 wherein it has been held that the plaintiff is not entitled to claim any amount from defendant No. 1, there is no question of award of any interest to the plaintiff. ( 21 ) THE issue stands disposed of accordingly. ISSUE N0. 4 ( 22 ) IN view of the decision of Issue No. 3 wherein it has been held that the plaintiff is not entitled to claim any amount from defendant No. 1, there is no question of award of any interest to the plaintiff. The issue, therefore, stands answered against plaintiff. ( 23 ) IN view of the decision of the forgoing issues, the plaintiff is not entitled to decree as prayed in the suit. ( 24 ) THE suit stands dismissed. No orders as to costs.