Appeal No 86 of 1959
Appeal by special leave from the judgment and order dated March 27 1957 of the Patna High Court in Appeal from Original Decree No 359 of 1948
A V Viswanatha Sastri and section P Varma for the appellant
882 H N Sanyal Additional Solicitor General of India R Ganapathy Iyer and T M Sen for the respondent
July 24
The Judgment of the Court was delivered by SHAH J
Bikhraj Jaipuria hereinafter called the appellant is the sole proprietor of a grocery business conducted in the name and style of Rajaram Vijai Kumar in the town of Arrah in the State of Bihar
In the months of July and August 1943 the Divisional Superintendent East Indian Railway under three  purchase orders  agreed to buy and the appellant agreed to sell certain quantities of food grains for the employees of the East Indian Railway
The following table sets out the purchase prices the commodities the dates of purchase orders the quantities and the rates and the method of supply
Purchase Date of Kinds Quantity Rates
Order purchase of of No orders
commo commo dity
dities
1 2 3 4 5 69
20 7 1943
Gram 1st 1000 mds  Rs 15 quality
per md
plus cost of new bags not exceeding Rs 75 per 100 bags FOR any EIRly
sta tion in Bihar
4 7 1943
Rice 1000 mds
 Rs 22 8 0 Dhenki plus cost of Medium bags not ex quality
ceeding Rs75 883 1 2 3 4 5 per cent per md
FOR any station on the division
Wheat 5000 mds
 Rs 20 8 0 white per md
with as per bags FOR sample
any station on EIR on the Division
24 8 1943
Rice 15000 mds  Rs 24 medium per md
with quality
out bags FOR EI Rly
station in Bihar
Purchase orders Nos 69 and 76 were signed by SC Ribbins Personal Assistant to the Division at Superintendent and purchase order No 106 was signed by the Divisional Superintendent
Under the purchase orders delivery of grains was to commence within seven days  of acceptance and was to  be completed within one month
The appellant delivered diverse quantities of foodgrains from time to time but was unable fully to perform the contracts within the period stipulated
Between July 20 1943 and August of 4 1943 he supplied 3465 maunds of rice and between September 1 1943 and September 19 1943 he supplied 1152 maunds 35 seers of wheat
In exercise of the powers conferred by clb of Sub r
2 of r81 of the Defence of India Rules the Government of Bihar by notification No 12691 PC dated September 16 1943 directed that commodities named in column I of the schedule shall not from and including September 20 1943 and until further notice be sold at any primary source of supply or by the proprietor manager or employee of any mill in the Province of Bihar at prices exceeding those 884 specified in the second column of the schedule
The controlled rat  of rice medium was Rs 18 per standard maund of wheat red Rs 17  of wheat white Rs 18 and of gram Rs 12 8 0
The Sub Divisional Magistrate District Arrah issued on September 21 1943 a price list of controlled articles fixing the same prices as were fixed for wheat rice and gram by the notification issued by the Government of Bihar
By cl
2 of the notification a warning was issued that in the event of the dealers selling controlled articles at rates exceeding those fixed or with holding stocks of such articles from sale they will be liable to prosecution under r81 1 of the Defence of India Rules
 By a telegraphic communication dated Sep tember 28 1943 the Divisional Superintendent informed the appellant that under the purchase orders foodgrains tendered for delivery will not unless despatched before October 1 1943 be accepted and barring a consignment of 637 maunds 20 seers accepted on October 7 1943 the Railway Administration declined to acceptdelivery of food grains offered to be supplied by the appellant after October 1 1943
The appellant served a notice upon the Divisional Superintendent coraplaining of breach of contract and sold between February la and February 23 1944 the balance of foodgrains under the purchase orders which were lying either at the various railway stations or in his own godowns
The appellant then called upon the Railway Administration to pay the difference between the price realised by sale and the contract price and failing to obtain satisfaction commenced an action Suit No 35948A in the court of the First Additional Subordinate Judge Patna for a decree for Rs 289995 15 3 against the Dominion of India
The appellant claimed Rs 232665 12 0 being the difference between the contract price and the price realised Rs42709 10 3 as interest and Rs 14620 9 0 as freight wharf
885 age cartage price of packing material labour charges and costs incurred in holding the sale
The appellant submitted that under the terms of the purchase orders supply was to commence within seven days of the date of receipt of the orders and was to be completed within one month but it was not intended that time should be of the essence of the contract and in the alternative that the Railway Administration had waived the stipulation as to time in the performance of the contracts and therefore he was entitled the Railway Administration having committed breach of the contracts to recover as compensation the difference between the contract price and the price for which the grains were sold
The suit was resisted by the Dominion of India contending inter alia that the appellant had no cause of action for the claim in the suit that the contracts between the appellant and the Divisional Superintendent Dinapur were not valid and binding upon the Government of India and that the contracts were liable to be avoided by the Government that time was of the essence of the contracts that stipulations as to time were not waived and that no breach of contract was committed by the East Indian Railway Administration and in any event the appellant had not suffered any loss as a result of such breach
By the written statement it wag admitted that the East Indian Railway through the Divisional Superintendent Dinapur had by three orders set out in the plaint agreed to buy and the appellant had agreed to sell the commodities specified therein but it was denied that the Divisional Superintendent had been given complete authority to enter into contracts for the supply of foodgrains
 The trial court held that time was not of the essence of the contracts and even if it was breach of the stipulation in that behalf was waived
It further_held that the plea that the contracts were void because they were not in accordance with the 886 provisions of section 175 3 of the Government of India Act 1935 could not bepermitted to be urged no such plea having been raised by the written statement
Holding that the Divisional Superintendent was authorised to enter into the contracts for purchase of foodgrains and that he had committed breach of contracts the trial Judge awarded to the appellant Rs 129460 7 0 with interest thereon at the rate of 6 per annum from October 1 1943 to the date of the institution of the suit and further interest at 6 on judgment
Against that decree an appeal was preferred by the Union of India to the High Court of Judicature at Patna and the appellant filed cross objections to the decree appealed from
The High Court held that time was of the essence of the contracts but the Railway Administration having a accepted the goods tendered after the expiration of the period prescribed thereby the stipulation as to time was waived
The High Court further held that by the notification under r 81 of the Defence of India Rules performance of the contracts had not been rendered illegal but the Divisional Superintendent had no authority to enter into contracts to purchase food grains on behalf of the Railway Administration and that in any event the contracts not having been expressed to be made by the Governor General and not having been executed on behalf of the Governor General by an officer daily appointed in that behalf and in manner prescribed the contracts were unenforceable
The High Court also held that the appellant was not entitled to a decree for compensation because he had failed to prove the ruling market rate on the date of breach viz October 1 1943
The High Court also observed that the trial court erred in awarding interest prior to the date of the suit and in so holding relied upon the judgment of the Privy Council in Bengal Nagpur Railway Co Ltd vs Ruttanji Ramji and others 1
1 L R 1938 65 J A 66 887 In this appeal by the appellant two questions fall to be determined 1 whether relying upon the purchase orders signed by the Divisional Superintendent which were not made and executed in the manner prescribed by s175 3 of the Government of India Act 1935 the appellant could sue the Dominion of India for compensation for breach of contract and 2 whether the appellant has proved the ruling market rate on October 1 1943 for the commodities in question
 The finding that the Railway Administration had waived the stipulation as to the performance of the contracts within the time prescribed though time was under the agreement of the essence is not challenged before us on behalf of the Union of India
If the finding as to waiver is correct manifestly by his telegraphic intimation dated September 28 1943 that the foodgrains not despatched before October 1 1943 will not be accepted the Divisional Superintendent committed a breach of the contract
Section 175 3 of the Government of India Act as in force at the material time provided  Subject to the provisions of this Act with respect to the Federal Railway Authority all contracts made in the exercise of the executive authority of the Federation or of a Province shall be expressed to be made by the Governor General or by the Governor of the Province as the case may be and all such contracts and all assurances of property made in the exercise of that authority shall be executed on behalf of the Governor General or Governor by such persons and in such manner as he may direct or authorise
 The Federal Railway Authority had not come
into being in the year 1943 it was in fact never set up
The contracts for the supply of foodgrains were undoubtedly_ made in the exercise of executive 888 authority of the Federation
The contracts had therefore under section 1753 a to be expressed to be made by the Governor General b to be executed on behalf of the Governor General and e to be execrated by officers duly appointed in that behalf and in such manner as the Governor General may direct or authorise
But no formal contracts were executed for the supply of foodgrains by the appellant  he had merely offered to supply foodgrains by letters addressed to the Divisional Superintendent and that officer had by what are called purchase orders accepted those offers
These purchase orders were not expressed to be made in the name of the Governor General and were not executed on behalf of the Governor General
The purchase orders were signed by the Divisional Superintendent either in his own hand or in the hand of his Personal Assistant
In the first instance it has to be considered whether the Divisional Superintendent had authority to contract on behalf of the Railway Administration for buying foodgrains required by the Railway Administration
By Ex
M 2 which was in operation at the material time all instruments relating to purchase or hire supply and conveyance of materials stores machinery plant telephone lines and connections coal etc could be executed amongst others by the Divisional Superintendent but contracts relating to purchase of foodgrains are not covered by that authority
Under item 34 which is the residuary item all deeds and instruments relating to railway matters other than those specified in items 1 to 33 may be executed by the Secretary of the Railway Board
It is common ground that there is no other item which specifically authorises the making and execution of contracts relating to purchase of foodgrains deeds and instruments relating to purchase of food grains therefore fall within item 34
The Secretary to the Railway Board had not executed these purchase orders  but the trial Court held 889 that the Divisional Superintendent was authorised to enter into contracts with the appellant for the supply of foodgrains
In so holding the trial judge relied upon the evidence of Ribbins Grain Supply Officer and Personal Assistant to the Divisional Superintendent Dinapur
The High Court disagreed with that view
The High Court observed that the authority of the officer acting on behalf of the Governor General must be deduced from the express words of the Governor General himself expressed by rules framed or by notification issued under section 1753
No notification has been produced in this case showing that the Divisional Superintendent had been authorised by the Governor General to execute such contracts on his behalf nor has any rule been produced which conferred authority upon the Divisional Superintendent to make such contracts
 After referring to paragraph 10 of the notification exhibit M 2 items 1 to 34 the High Court observed Therefore this notification rather shows that the Divisional Superintendent had no authority to execute the contracts for the purchase of food grains In our view the High Court was in error in holding that the authority under section 1753 of the Government of India Act 1935 to execute the contract could only be granted by the Governor General by rules expressly promulgated in that behalf or by formal notifications
This court has recently held that special authority may validly be given in respect of a particular contract or contracts by the Governor to an officer other than the officer notified under the rules made under section 1753
In The State of Bihar vs Ms Karam Chand Thapar and Brothers Ltd Venkatarama Aiyar J speaking for the court observed  1  890 It was further argued for the appellant that there being a Government notification of a formal character we should not travel outside it and find authority in a person who is not authorised thereunder
But section 175 3 does not prescribe any particular mode id which authority must be conferred
Normally no doubt such conferment will be by notification in the Official Gazette but there is nothing in the section itself to preclude authorisation being conferred ad hoc on any person and when that is established the requirements of the section must be held to be satisfied In that case an agreement to refer to arbitration on behalf of the Government of Bihar was executed by the Executive Engineer whereas by the notification issued by the Government of Bihar under s175 3 all instruments in that behalf had to be executed by the Secretary or the Joint Secretary to the Government
This Court on a consideration of the correspondence produced in the case agreed with the High Court that the Executive Engineer had been specially authorised by the Governor acting through his Secretary to execute the agreement for reference to arbitration
Section 175 3 in terms does not provide that the direction or authority given by the Governor General or the Governor to a person to execute contracts shall be given only by rules or by notifications and the High Court was in our judgment in error in assuming that such authority can be given only by rules expressly framed or by formal notifications issued in that behalf
In para 5 of the plaint the appellant pleaded  That for the purposes and under the authority conferred as noted in the para 3 above in July and August 1943 the said E 1
through its then Divisional Superintendent Dinapur by three diverse orders agreed to buy and the plaintiff agreed to sell the following commodities at the rates mentioned against them 891 By para 3 of the written statement the Dominion of India accepted the allegations made in para 5 of the plaint
It is true that by paragraph 1 the authority of the Divisional Superintendent to enter into contract with trading firms dealing in foodgrains for the supply of foodgrains was denied and it was further denied that the Divisional Superintendent was invested with complete authority to enter into contracts for the purchase of food supplies and to do all that was necessary in that connection
 There was some inconsistency between the averments made in paragraphs 1 and 3 of the written statement but there is no dispute that the purchase orders were issued by the Divisional Superintendent for and on behalf of the East Indian Railway Administration
Pursuant to these purchase orders a large quantity of foodgrains was tendered by the appellant these were accepted by the Railway Administration and payments were made to the appellant for the grains supplied
Employees of the Railway Administration wrote letters to the appellant calling upon him to intimate the names of the railway stations where grains will be delivered and about the date when the supply
will commence
They fixed programmes for inspection of the goods kept wagons ready for accepting delivery held meetings on diverse occasions for settling programmes for the supply of grains rejected grains which were not according to the contract entered into correspondence with the appellant about the return of empty bags accepted bills and railway receipts and made pay ments returned certain bills in respect of the grains tendered beyond the period of contract and did diverse other acts in respect of the goods which could only be consistent with the contracts having been made with the authority of the Railway Administration granted to the Divisional Superintendent
There is also the evidence of Ribbins which clearly supports the vie that the agreements to purchase foodgrains by the Divisional 892 Superintendent were part of a scheme devised by the Railway Administration at the time of the serious famine in 1943 in Bengal
In cross examination Ribbins stated When the Bengal famine arose in April May 1943 the necessity for a scheme of arrangement of supplying foodgrains to E I Railway employees arose 
A scheme was drawn up for carrying out this work in writing
In other words orders were received from Head Office Calcutta about it
The Deputy General Manager Grains Calcutta issued the necessary orders 
The agent or General Manager as he is called appropriated the above functionary
He must have done so presumably under orders 
The entire scheme did subsequently get the assent of the Railway Board
From time to time order came with instruction from Head Office
All such directions should be in the office of D Supdt Dinapur
Some posts had to be created for carrying out this scheme
Originally one post of Asstt
Grain Supply Officer was created
Subsequently two posts were created one on a senior scale and the other as Asstt
in Dinapur Dv
staff had to be appointed to be in charge of the grain shops
They were exclusively appointed to work the grain shop Organisation
The Railway made some arrangement in some places for accommodation and additional storage
Grain shops were located At these places when accommodation was made for additional storage
 Ribbins was for some time a Grain Supply Officer under the East Indian Railway and he admitted that orders similarto the purchase orders in question in this litigation were drawn up in cyclostyled forms as per orders from the Head Office
 The witness stated that the instructions of the Head Office were in the office file
None of these documents were however produced or tendered in evidence by the Railway Administration 893 The evidence on the whole establishes that with a view to effectuate the scheme devised by the Railway Board for distributing foodgrains to their employees at concessional rates arrangements were made for procuring foodgrains
This scheme received the approval of the Railway Board and Railway Officers were authorised to purchase transport and distribute foodgrains
If in the implementation of the scheme the foodgrains were received by the Railway Administration special wagons were provided and goods were carried to different places and distributed and payments were made for the foodgrains received by the Railway Administration after testing the supplies the inference is inevitable that the Divisional Superintendent who issued the purchase orders acted with authority specially granted to him
The evidence of Ribbins supported by abundant docu mentary evidence establishes beyond doubt that the Divisional Superintendent though not expressly authorised by the notification exhibit M 2 to contract for the purchase of foodgrains was specially authorised to enter into these contracts for the purchase of foodgrains
The question still remains whether the purchase orders executed by the Divisional Superintendent but which were not expressed to be made by the Governor General and were not executed on behalf of the Governor General were binding on the Government of India
Section 1753 plainly requires that contracts on behalf of the Government of India shall be executed in the form prescribed thereby  the section however does not set out the consequences of non compliance
Where a statute requires that a thing shall be done in the prescribed manner or form but does not set out the consequences of non compliance the question whether the provision was mandatory or directory has to be adjudged in the light of the intention of the legislature as disclosed by the 894 object put pose and scope of the statute
If the statute is mandatory the thing done not in the manner or form prescribed can have no effect or validity  if it is directory penalty may be incurred for non compliance but the act or thing done is regarded as good
As observed in Maxwell on Interpretation of Statutes 10th Edition p 376  It has been said that no rule can be laid down for determining whether the command is to be considered as a mere direction or instruction involving no invalidating consequences in its disregard or as imperative with an implied nullification for disobedience beyond the fundamental one that it depends on the scope
and object of the enactment
It may perhaps be found generally correct to say that nullification is the natural and usual consequence of disobedience but the question is in the main governed by considerations of convenience and justice and when that result would involve general inconvenience or injustice to innocent persons or advantage to those guilty of the neglect without promoting the real aim and object of the enactment such an intention is not to be attributed to the legislature
The whole scope and purpose of the statute under consideration must be regarded
 Lord Campbell in Liverpool Borough Bank vs Turner1 observed No universal rule can be laid down as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience
It is the duty of Court of justice to try to get at the real intention of the Legislature by carefully attending to the whole scope of the statute to be construed
 It is clear that the Parliament intended in enacting the provision contained in section 1753 that 1  895 the State should not be saddled with liability for unauthorised contracts and with that object provided that the contracts must show on their face that they are made on behalf of the State i e by the Head of the State and executed on his behalf and in the manner prescribed by the person authorised
The provision it appears is enacted in the public interest and invests public servants with authority to bind the State by contractual obligations incurred for the purposes of the State
It is in the interest of the public that the question whether a binding contract has been made between the State and a private individual should not be left open to dispute and litigation  and that is why the legislature appears to have made a provision that the contract must be in writing and must on its face show that it is executed for and on behalf of the head of the State and in the manner prescribed
The whole aim and object of the legislature in conferring powers upon the head of the State would be defeated if in the case of t contract which is in form ambiguous disputes are permitted to be raised whether the contract was intended to be made for and on behalf of the State or on behalf of the person making the contract
This consideration by itself would be sufficient to imply a prohibition against a contract being effectively made otherwise than in the manner prescribed
Itm is true that in some cases hardship may result to a person not conversant with the law who enters into a contract in a form other than the one prescribed by law
It also happens that the Government contracts ire sometimes made in disregard of the forms prescribed  but that would not in our judgment be a ground for holding that departure from a provision which is mandatory and at the same time salutary may be permitted
There is a large body of judicial opinion in the High Courts in India on the question whether 896 contracts not ill form prescribed by the Constitution Acts are binding upon the State
The view has been consistently expressed that the provisions under the successive Constitution Acts relating to the form of contract between the Government and the private individual are mandatory and not merely directory
In Municipal Corporation of Bombay vs Secretary of State 1 the true effect of section 1 of Si 22 and 23 Vic
c 41 fell to be determined
The Governor General of India in Council and the Governors in Council and officers for the time being entrusted with the Government were subject to restrictions prescribed by the Secretary of State in Council empowered to sell and dispose of real and personal estate vested in Her Majesty and to raise money on such estate and also to enter into contracts within
the respective limits for the purposes of the Act
it was provided that the Secretary of State in Council
may be named as a party to such deed contract or instrument and the same must be expressed to be made on behalf of the Secretary of State in Council by or by the order
of the Governor General in Council or Governor in Council but may be executed in other respects in like manner as other instruments executed by or on behalf of him or them respectively in his or their official capacity and may be enforced by or against the Secretary of State in Council for the time being
In a suit between the Government of Bombay and the Municipal Corporation of Bombay the latter claimed that it was entitled to remain in occupation on payment of a nominal rent of an extensive piece of land because of a resolution passed by the Government of Bombay sanctioning such user
Jenkins C J in delivering the judgement of the Court observed
I think that a disposition in 1865 of Crown  1 I L R 897 lands by the Governor in Council was dependent for its validity on an adherence to the forms prescribed and that therefore the Resolution was not a valid disposition of the property for the interest claimed
 In Kessoram Poddar and Co vs Secretary of State for India 1 it was held that in order that a contract may be binding on the Secretary of State in Council it must be made in strict conformity with the provisions laid down in the statute governing the matter and if it is not so made it is not valid as against him
The same view was expressed in section C Mitra and Co vs Governor General of India in Council 2 Secretary of State vs Yadavgir Dharamgir3 Secretary
of State and another vs G T Sarin and Company U P Government vs Lala Nanhoo Mal Gupta Devi Prasad Sri Krishna Prasad Ltd vs Secretary of State 6 and in section K Sen vs Provincial P Way D State of Bihar7
But Mr Viswanatha Sastri on behalf of the appellant contended that this court in Chatturbhuj Vithaldas Jasanth vs Moreshwar Parashram 8 has held that a contract for the supply of goods to the Government which is not in the form prescribed by article 299 1 of the Constitution which is substantially the same form as section 175 3 of the Government of India Act 1935 is not void and unenforceable
In that case the election of Chatturbhuj Jasani to the Parliament was challenged on the ground that he had a share or interest in a contract for the supply of goods to the Union Government
It was found that Jasani was partner of a firm which had entered into contracts with the Union Government for the supply of goods and these contracts subsisted on November 15 1951 and 1 ILR ILR  3 ILR ILR 1930 11 Lah375
5 AIR 1960 All
6 ILR 1941 All 741 7 7 AIR 1960 Pat
8  898 February 14 1952 respectively the last date for filing nominations and the date of declaration of the results of the election
This court held that Jasani was disqualified from being elected by virtue of the disqualification set out in section 7 b of the Representation of the People Act 43 of 1951
The contracts in that case were admittedly not in the form Prescribed by article 299 1 of the Constitution and relying upon that circumstance it was urged that the contracts were void and had in law no existence
In dealing with this plea Bose J speaking for the court observed  We feel that some reasonable meaning must be attached to article 2991
We do not think the provisions were inserted for the sake of mere form
We feel they are there to safeguard Government against unauthorised contracts
If in fact a contract is unauthorised or in excess of authority it is right that Government should be safeguarded
On the other hand an officer entering into a contract on behalf of the Government can always safeguard himself by having recourse to the proper form
In between is a large class of contracts probably by far the greatest in numbers which though authorised are for one reason or other not in proper form
It is only right that an innocent contracting party should not suffer because of this and if there is no other defect or objection we have no doubt Government will always accept the responsibility
If not its interests are safeguarded as we think the Constitution intended that they should be
 The learned Judge also observed It would in our opinion be disastrous to hold that the hundreds of Government officers who have daily to enter into a variety of contracts often of a petty nature and sometimes in an emergency cannot contract orally or through correspondence and that every petty contract must be effect ed by a ponderous legal document couched in a particular form 899 The rationale of the case in our judgment does not support the contention that a contract on behalf of a State not in the form prescribed is enforceable against the State
Bose J expressly stated that the Government may not be bound by the contract but that is a very different thing from saying that the contract as void and of no effect and that it only meant the principal Government could not be sued but there will be nothing to prevent ratification if it was for the benefit of the Government
 The facts proved in that case clearly establish that even though the contract was not in the form prescribed the Government had accepted performance of the contract by the firm of which Jasani was a partner and that in fact there subsisted a relation between the Government and the firm under which the goods were being supplied and accepted by the Government
The agreement between the parties could not in the case of dispute have beenenforced at law but it was still being carried out according to its terms  and the Court held that for the purpose of the Representation of the People Act the existence of such an agreement which was being carried out in which Jasani was interested disqualified him
It was clearly so stated when Bose J observed Now section 7 d of the Representation of the People Act does not require that the contracts at which it strikes should be enforceable against the Government  all it requires is that the contracts should be for the supply of goods to the Government
The contracts in question are just that and so are hit by the section
Reliance was also placed by counsel for the appellant upon cases decided under s40 of the Government of India Act 1915 which was continued in operation
even after the repeal of the Act 1915 by the 9th schedule to the Government of India Section 40 prescribed the manner in which the business of the Governor General in Council was to be conducted
It provided that all orders and other proceedings of the Governor General in Council shall be expressed to be made by the Governor General in Council and shall be signed by a Secretary to the Government of India or otherwise as the Governor General in Council may direct and shall not be called in question in any legal proceeding on the ground that they were not duly made by the Governor General in Council
In JK Gas Plant Manufacturing Co Rampur Ltd vs King Emperor 1 certain persons were accused of offences committed by them in contravention of cls
5 and 8 of the Iron and Steel Control of Distribution Order 1941 which order was not expressed to be made by the Governor General in Council as required by section 401 of the 9th schedule to the Constitution Act
The Federal Court held that the scope and purpose of the Act did not demand a construction giving a mandatory rather than a directory effect to the words in section 40 for in the first instance the provision that all orders of the Governor General in Council shall be expressed to be made by the Governor General in Council did not define how orders were to be made but only how they are to be expressed it implied that the process of making an order preceded and was something different from the expression of it
Secondly it was observed the provision was not confined to orders only and included proceedings and in the case of proceedings it was still clearly a method of recording proceedings which had already taken place in the manner prescribed rather than any form in which the proceedings must take place if they are valid
Thirdly it was observed that the provision relating to the signature by a Secretary to the Government of India or other person indicated that it was a provision as 1 901 to the manner in which a previously made order should be embodied in publishable form and it indicated that if the previous directions as to the expression of the order and proceedings and as to the signature were complied with the order and proceedings shall not be called in question in a court of law on one ground only
The rule contained in section 40 1 was in the view of the court one of evidence which dispensed with proof of the authority granted by the GovernorGeneral in respect of orders or proceedings which complied with the requirements prescribed  the making of the order or the proceedings was independent of the form of the order or proceedings expressing it
But it cannot be s aid that the making of the contract is independent of the form in which it is executed
The document evidencing the contract is the sole repository of its terms and it is by the execution of the contract that the liability ex contracti of either party arises
The principle of J K Gas Plant Manufacturing Co s case has therefore no application in the interpretation of section 175 3 of the Government of India Act 1935
Reliance was also placed upon Dattatreya Moreshwar Pangarkar vs The State of Bombay 1 and The State of Bombay vs Purshottam Jog Naik2
In both these cases orders made by the Government of Bombay under the Preventive Detention Act were challenged on the ground that the orders did not comply with the requirements of article 166 of the Constitution
Article
166 substantially prescribes the same rules for authentication of the orders of the Governor of a State as section 40 to the 9th schedule of the Government of India Act 1935 prescribed for the authentication of the orders of the Governor General and the Governors
In the former case this court observed that 1  2  902 the Preventive Detention Act contemplates and requires the taking of an executive decision for confirming a detention order under section 11 1 and omission to make and authenticate that decision in the form set out in article 166 will not make the decision itself illegalfor the provisions in that arti cle are merely directory and not mandatory
In the latter case an order which purported to have been made in the name of the Government of Bombay instead of the Governor of Bombay as required by article 166 was not regarded as defective and it was observed that in any event it was open to the State Government to prove that such an order was validly made
The court in those cases therefore held that the provisions of article 166 are directory and not mandatory
 These cases proceed on substantially the same grounds on which the decision in J k Gas Plant and Manufacturing Co s case  proceeded and have no bearing on the interpretation of section 175 3 of the Government of India Act 1935
Reliance was also placed upon the State of UP vs Manbodhan Lal Srivastava1 in which case this court held that the provisions of article 320 el
3 e of the Constitution relating to the consultation with the Public Service Commission before discharging at public servant are merely directory
The fact that certain other provisions in the Constitution are regarded as merely directory and not mandatory is no ground for holding that the provisions relating to the form of contracts are not mandatory
It maybe said that the view that the provisions in the Constitution relating to the form of contracts on behalf of the Government are mandatory may involve hardship to the unwary
But a person who seeks to contract with the Government must be deemed to be fully aware of 1  903 statutory requirements as to the form in which the contract is to be made
In any event inadvertence of an officer of the State executing A contract in manner violative of the express statutory provision the other contracting party acquiescing in such violation out of ignorance or negligence will not justify the court in not giving effect to the intention of the legislature the provision having been made in the interest of the public
It must therefore be held that as the contract was not in the form required by the Government of India Act 1935 it could not be enforced at the instance of the appellant and therefore the Dominion of India could not be sued by the appellant for compensation for breach of contracts
We are also of the view that the High Court was right in holding that the appellant failed to prove that he was entitled to compensation assuming that there was a valid and enforceable contract
The appellant claimed that he was entitled to the difference between the contract price and the price realised by sale of the foodgrains offered after October 11943 but not accepted by the Railway Administration
The High Court rightly pointed out that the appellant was if at all entitled only to compensation for loss suffered by him by reason of the wrongful breach of contract committed by the State such compensation being the difference between the contract price and the ruling market rate on October 11943 and that the appellant had failed to lead evidence about the ruling market rate on October 11943
The trial judge held that the control price list xxx was reliable for ascertaining the measure of damages in the case
This document was a notification relating to the controlled rates in operation in the district of Arrah by which the sale of foodgrains at prices exceeding the rates prescribed was made an offence
The appellant had obviously the option of delivering foodgrains at an railway station F O R in the Province of 904 Bihar and there is no evidence on the record whether orders similar to exhibit
M 2 were issued by the authorities in other districts of the Bihar State
But if the grains were supplied in the district of Arrah the appellant could evidently not seek to recover price for the goods supplied and accepted on and after October 1 1943 at rates exceeding those fixed by the notification for by the issue of the control orders on the contracts must be deemed to be superimposed the condition that foodgrains shall be sold only at rates specified therein
If the grains were to be supplied outside the district of Arrah the case of the appellant suffers from complete lack of evidence as to the ruling rates of the foodgrains in dispute on October 1 1943
The High Court was therefore right in declining to award damages
On the view taken by us this appeal must stand dismissed with costs
Appeal dismissed


Summary:
In the year 1943 the Divisional Superintendent East Indian Railway placed certain purchase orders with the appellant for the supply of foodgrains for the employees of the East Indian Railway
The orders were not expressed to be made in the name of the Governor General and were not executed on behalf of the Governor General as required by section 175 3 of the Government of India Act 1935
They were signed by the Divisional Superintendent either in his own hand or in the hand of his Personal Assistant
Some deliveries of foodgrain s were made under these orders and were accepted and paid for by the Railway Administration
But the Railway Administration declined to accept further deliveries of foodgrains
The appellant sold the balance of foodgrains under the purchase orders and filed a suit to recover the difference between the price realised by sale and the contract price
The respondent resisted the suit inter alia on the ground that the contracts were not binding on it
Held that the contracts were not binding on the respondent and it was not liable for damages for breach of the contracts
Under s 175 3 of the Government of India Act 1935 as it stood at the relevant time the contracts had a to be expressed to be made by the Governor General b to be executed on behalf of the Governor General and F to be executed by officers duly appointed in that behalf and in such mariner as the Governor General directed or authorised
The 881 authority to a person to execute contracts may be conferred not only by rules expressly trained and by formal notifications issued in this behalf but may also be specially conferred
The evidence in the case showed that such authority was specially conferred upon the Divisional Superintendent
But the contracts were not expressed to be made by the Governor General and were not executed on his behalf The provisions of section 1753 were mandatory
The object of enacting these provisions was that the State should not be saddled with liability for unauthorised contracts and hence it was provided that the contracts trust show on their face that they were made by the Governor General and executed on his behalf in the manner prescribed by the person authorised
State of Bihar vs Ms Karam Chand Thapar and Bros Ltd   followed
Liverpool Borough Bank vs Turner   Municipal Corporation of Bombay vs Secretary of State I L R  Kessoram Poddar and Co vs Secretary of State for India I L R section C Mitra and Co vs Governor General of India in Council ILR  Secretary of State vs Yadavgir Dharamgir I L R  Secretary of State vs GT Sarin and Co 1
L R  U I 
Government vs Lal Nanhoo Mal Gupta A 1
R 1960 All 420 and Devi Prasad Sri Krishna Prasad Ltd vs Secretary of State I L R 1941 All 741 referred to
section K Sen vs Provincial P W D State of Bihar A 1
R 1960 Pat Chatturbhui Vithaldas Jasani vs Moreshwar Prashram  J K Gas Plant Mfg Co Rampur Ltd vs King Emperor  Moreshwar Pangarkar vs State of Bombay   State of Bombay vs Purshottam Jog Naik  and State of UP vs Manbodhan Lal Srivastava 1958 section C R 533 distinguished