Case: M/s. Hansraj Gupta &amp; Company Vs. Union of India

Mahesh Chandra was deemed to be terminated with effect from 30-9-1944 and that the subsequent supplies were by the clients of Shri Khurshed Lal (that is to say the plaintiff) was useless. It contradicts the assertion made in the paragraph 6 of the plaint that the wood was actually supplied by the contractor Mahesh Chandra (defendant No. 2) upto 31-3-1945. These bare assertions of some Military Officers could not alter facts, or the law or result in a fresh contract with the plaintiff. The difficulty which confronted this new case, sought to be set up by the plaintiff, is even more formidable than mere want of signature of a duly authorised sanctioning authority on the letter. The constitutional provisions of Section 175 (3) of the Government of India Act would bar mere assertions of this kind from operating as evidence of a contract. Again as held by the High Court, the claim for the price of goods supplied on a fresh contract, even if assumed to have come into existence in 1946, would be beyond three years in 1950 so that it would be barred by three years rule of limitation prescribed by Article 52.Moreover, a fresh agreement in 1946 to pay for a past supply of goods from 1944 to 1945, if already covered by the contract of 1944 and fully paid for under it as held by the trial Court and the High Court, would fail for want of consideration. So, the whole case of a fresh contract of l946 is also quite untenable.12. We may now turn to the plaintiffs claim to the benefit of Section 70 of the Contract Act put forward in this Court for the first time. It was urged, on the strength of Piloo Dhunjishaw Sidhwa v. Municipal Corpn. of the City of Poona, (1970) 3 SCR 415 = (AIR 1970 SC 1201 ) that, so long as the claim is there, this Court is not precluded from applying Section 70 of the Contract Act for the first time even on appeal by special leave. We, however, think that the conditions for the applicability of this Section must at least be set out in the pleadings and proved. As already noticed above, the plaintiff has not said anywhere in the plaint that any supplies were made by the plaintiff to the Army authorities. On the other hand, the assertion is that the supplies were made by the contractor (defendant No. 2).Section 70 of the Contract Act enables the person who actually supplies goods or renders some services, not intending to do so gratuitously, to claim compensation from the Person who enjoys the benefit of the supply made or services rendered. It is a liability which arises on equitable grounds even though express agreement or a contract may not be proved.13. The plaintiffs authority to realise monies was confined to recoveries of price for supplies made by defendant No. 2 under an express agreement between the defendants. And, the plaintiffs suit too is confined to claims on behalf of defendant No. 2, the actual supplier, for supplies under the contract and not outside it. It is urged not without force, on behalf of the Union of India, that evidence could have been led to show that the plaintiff made no supplies whatsoever, if the plaintiff had set up even an alternative case to that effect in conflict with the case actually set up of supplies made by the pro forma defendant No. 2 (i e the supplying contractor)14. Another contention on behalf of the Union of India was that S. 70 of the Contract Act only applies to cases where goods are supplied or services rendered without any payment whatsoever having been made for them. It is submitted that the supplying contractor having been fully paid at the contracted rates as found by the High Court and the Trial Court, no claim under Section 70 of the Contract Act was maintainable at all. Application of that Section, it is contended, would be excluded where the contract made is shown to have operated and to have been discharged as held by the High Court and the Trial Court. The learned Counsel for the Union of India was however not certain whether the finding was correct that the defendant contractor was actually fully paid, in accordance with the teens of the original contract, at unenhanced stipulated rates. We have not been taken through the whole evidence so as to be able to re-assess it on that question. We are not ordinarily called upon to do so on an appeal by special leave. We, therefore, prefer to rest our decision on the claim under Section 70 of the Contract Act on the ground that, on the case set up in the plaint, the plaintiff cannot fall back on any liability under Section 70 of the Contract Act when the supplies were obviously not actually made by the plaintiff.15. If, however, it is true that the plaintiff company, which claimed payment of Rs. 1,90,042/0/5 on bilk submitted, from 22-l-l 947 to 30-3-l948 for unpaid for supplies at enhanced rates, with interest at 7 l/2% per annum upto l-l-1950, so as to bring the total claim to Rs. 2,28,397/14/5, has not received payment at all for supplies of wood at rates stipulated for in the written contract for any period covering the contract for supplies made from 1-4-1944 to 31-3-1945, because the actual rates at which the payments were to be made were disputed and remained undecided due to no fault of the supplying contractor or the plaintiff, we hope that, as suggested by the learned Counsel for the Union of India, the plaintiff will be able to obtain payment for the unpaid for supplies actually made at rates specified in the original contract although the suit for it is barred by time. Even though the plaintiff may be morally entitled to that much payment at least we are unable to decree the suit for a time barred claim.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]11. We think that insurmountable difficulties also lie in the path of acceptance of each of the last mentioned submissions of the plaintiff appellant. We will take up the first submission first. We find that there was no case set up by the plaintiff that there was any privity of contract between the plaintiff and the Union of India. The mere statement in the letter ofthat the contract with the supplier Mahesh Chandra was deemed to be terminated with effect fromand that the subsequent supplies were by the clients of Shri Khurshed Lal (that is to say the plaintiff) was useless. It contradicts the assertion made in the paragraph 6 of the plaint that the wood was actually supplied by the contractor Mahesh Chandra (defendant No. 2) uptoThese bare assertions of some Military Officers could not alter facts, or the law or result in a fresh contract with the plaintiff. The difficulty which confronted this new case, sought to be set up by the plaintiff, is even more formidable than mere want of signature of a duly authorised sanctioning authority on the letter. The constitutional provisions of Section 175 (3) of the Government of India Act would bar mere assertions of this kind from operating as evidence of a contract. Again as held by the High Court, the claim for the price of goods supplied on a fresh contract, even if assumed to have come into existence in 1946, would be beyond three years in 1950 so that it would be barred by three years rule of limitation prescribed by Article 52.Moreover, a fresh agreement in 1946 to pay for a past supply of goods from 1944 to 1945, if already covered by the contract of 1944 and fully paid for under it as held by the trial Court and the High Court, would fail for want of consideration. So, the whole case of a fresh contract of l946 is also quitehowever, think that the conditions for the applicability of this Section must at least be set out in the pleadings and proved. As already noticed above, the plaintiff has not said anywhere in the plaint that any supplies were made by the plaintiff to the Army authorities. On the other hand, the assertion is that the supplies were made by the contractor (defendant No. 2).Section 70 of the Contract Act enables the person who actually supplies goods or renders some services, not intending to do so gratuitously, to claim compensation from the Person who enjoys the benefit of the supply made or services rendered. It is a liability which arises on equitable grounds even though express agreement or a contract may not behave not been taken through the whole evidence so as to be able toit on that question. We are not ordinarily called upon to do so on an appeal by special leave. We, therefore, prefer to rest our decision on the claim under Section 70 of the Contract Act on the ground that, on the case set up in the plaint, the plaintiff cannot fall back on any liability under Section 70 of the Contract Act when the supplies were obviously not actually made by the plaintiff.15. If, however, it is true that the plaintiff company, which claimed payment of Rs. 1,90,042/0/5 on bilk submitted, from948 for unpaid for supplies at enhanced rates, with interest at 7 l/2% per annum uptoso as to bring the total claim to Rs. 2,28,397/14/5, has not received payment at all for supplies of wood at rates stipulated for in the written contract for any period covering the contract for supplies made from5, because the actual rates at which the payments were to be made were disputed and remained undecided due to no fault of the supplying contractor or the plaintiff, we hope that, as suggested by the learned Counsel for the Union of India, the plaintiff will be able to obtain payment for the unpaid for supplies actually made at rates specified in the original contract although the suit for it is barred by time. Even though the plaintiff may be morally entitled to that much payment at least we are unable to decree the suit for a time barred claim.