Case: Har Prasad Choubey Vs. Union of India &amp; Another

performing its functions. We see from Ext. P. 8 that the Private Secretary to the Minister wrote to the Coal Commissioner asking him to take personal interest in the matter and to arrange for refund, and the appellant was also informed with reference to his notice sent through his Lawyer dated 7-11-1949, that the matter was receiving attention. Even on 19th November, 1949 the Coal Commissioner wrote to the Chief Engineer, Bengal Nagpur Railway that it was not possible to allot wagons and that arrangements may be made for the cancellation of the sale and refund of the amount as advised by the Ministry of Industry and Supply (see Ext. P. 9) and the Chief Engineer wrote to the appellant on 21-12-1949 more than a year after the appellants successful bid, referring to the above letter from the Coal Commissioner, and informing the appellant that action was being taken as instructed by the Coal Commissioner, to dispose of the appellants case promptly. After all this, on 22nd December, 1949 Secretary to the Coal Commissioner wrote to the Chief Engineer that it was then possible to allot wagons for the movement of coal provided the auction purchaser was still interested in the movement of such coal. As would be apparent from the narration of the facts so far, this offer came too late. But it is interesting to note that it is on this letter that much of the defence to the appellants suit was relied upon. We have no hesitation in holding that by this time everybody, including the Ministry, the Railways and the Coal Commissioner had proceeded on the basis that the coal could not be removed from Kumhari and that the sale was to be cancelled and the appellants money refunded, and this letter will not in any way affect his claim. The appellant, therefore, rightly wrote on 9th January, 1950 that he was not in a position to take delivery of the coal and expressing his surprise at the offer to allot wagons at that stage, and asked for refund of his money immediately. He again wrote to the General Manager, Bengal Nagpur Railway on 27-2-1950 asking for refund in accordance with the letter from the Ministers Private Secretary dated 9th November, 1949, already referred to. It is interesting to note that somewhere in between the appellant had gone to the office of the Secretary, Railway Board and was told that the file relating to this matter had been lost and he therefore had sent copies of various correspondence (see Ext. P. 17). The Secretary, Railway Board, wrote an express letter on 19th February, 1951 to the General Manager, Bengal Nagpur Railway pointing out that the matter had been pending for more than two years and that information may be furnished without further delay. The subject-matter was cancellation of auction sale. The appellant again wrote to the Minister of State in the Ministry of Transport and Railway complaining about the failure to refund his money and mentioning the earlier history pointed out that his amount was not being refunded by the Railways because the responsibility for the loss in coal due to natural reasons could not be fixed and he wanted that he should not be driven to the courts. How true this is seen from the fact that the coal is said to have been ultimately disposed of for a paltry sum of Rs. 111/-.8. Finally, on 23-11-1951 the appellant sent a notice apparently under Section 80 of the Code of Civil Procedure, and received a reply on 24-12-1951 that according to the terms of the auction sale the Railway Administration was not liable to refund the purchase money, in spite of the fact that the Coal Commissioner issued a directive to the Bengal Nagpur Railway to refund the same. It is, therefore, clear that the Railways were avoiding responsibility for what had taken place and the appellant, therefore, filed the suit out of which this appeal arises. The learned Additional District Judge decreed the appellants suit but denied him the interest. The respondent filed an appeal to the High Court and the appellant filed a memorandum of cross objections in respect of his claim for interest which was disallowed by the lower Court. The High Court allowed the appeal and dismissed the appellants cross objections and this appeal has been filed by the appellant.9. This elaborate narration would make it clear that the appellant had bid for the coal under the honest and reasonable impression that he would be allowed to transport the coal to Ferozabad, that this was thwarted by the attitude of the Coal Commissioner, that later on the parties proceeded on the basis that the auction sale was to be cancelled and the appellant refunded his money. But apparently because by that time much of the coal had been lost and the Railways would have been in difficulty to explain the loss they chose to deny the appellants claim. We can see no justification on facts for such a denial and the defendants cannot refuse to refund the plaintiffs amount. The contract had become clearly frustrated. We must make it clear that we are not referring to the refusal to supply wagons but the refusal of the Coal Commissioner to allow the movement of coal to Ferozabad in spite of the fact that it was not one of the conditions of the auction. The appellant is, therefore, clearly entitled to the refund of his money. Furthermore, the contract itself not being in accordance with Section 175 of the Government of India Act is void and the appellant is entitled to the refund of his money. We are unable to understand the reasoning of the High Court when it proceeds as though the appellant was trying to enforce the contract. We can see no justification for the lower Court refusing to allow interest for the plaintiffs amount at least from the date of his demand, or the latest from the date of suit.

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

Explanation:
1[ds]5. It would be apparent from narrative of the facts so far that the appellant who had come from Ferozabad to Kumhari, which is said to be 800 miles away, to purchase this slack coal would naturally have expected to have the wagon facility provided for transporting this coal to Ferozabad. There is, of course, nothing to show that he had made it a specific condition when he bid at the auction that wagons for transport should be provided. But it is implicit in the circumstances of this case that he expected it to be provided. As he had not been told that the coal was to be consumed locally and the Coal Commissioner had permitted the sale it cannot be said to be an unreasonable expectation on his part. If we take it that he was entitled to transport it to Ferozabad the attitude of the Coal Commissioner that the coal was to be consumed locally, a condition which was not communicated to the appellant when he bid for the coal, is clearly one which cannot be supported. The refusal to provide the wagons for the transport seems to be a way of enforcing a condition that the coal should be consumed locally. In this context the supply of wagons assumes a secondary place.6. Finding that he had to face a stone wall in the face of the refusal of the Coal Commissioner, the appellant approached the Minister of State in the Ministry of Transportation of the Government of India pointing out that no condition was imposed when he purchased the coal that it was to be locally consumed, that the Coal Commissioner was unnecessarily harassing him, that as the rainy season was fast approaching he feared that the coal dust would be spoiled if not removed, that the Transportation Manager of Bengal Nagpur Railway had told him that it was not possible to supply him wagons unless the Coal Transport Officer agreed, and asked for allotment of a sufficient number of wagons to transport the coal from Kumhari to Ferozabad. The appellant also seems to have apprised the Minister for Industry and Supply and in reply he was told by the Deputy Secretary, on behalf of the Minister, on 18th May, 1949 to sell the coal for consumption locally and if it was not possible to apply for cancellation of the auction sale and to ask for refund from the District Engineer, Nagpur and that the Coal Commissioner will attend to the distribution of the coal for local consumption. A copy of the letter was sent to the Coal Commissioner asking him to let him know whether it would be possible to utilize the coal locally and a suggestion was made that to avoid recurrence of cases of this type the Coal Commissioner should in future auction sales make it clear that rail transport for the movement of coal to other destinations will not be provided. This, of course, was a most reasonable view to take. Even then the appellant wrote on 7th June, 1949 to the Minister of Industries and Supply for allotment of wagons if not in one instalment at least at the rate of 10 wagons per month. At last onin sheer despair and having apparently no response to his letter of the 7th June he took the Ministers suggestion and wrote to the District Engineer, Nagpur for cancellation of the auction sale and refund of the money deposited by him. On the same day a letter went from the District Engineer to the appellant asking him to remove the coal or else to pay occupation fees. The appellant replied on 1st August, 1949 that as the Coal Commissioner had imposed a condition that the coal was to be consumed locally, the Ministry of Industry and Supply had advised him to ask for cancellation of the auction sale and to ask for refund of the money and accepting that advice he had applied for cancellation of the auction sale and refund of the money. Onhe again wrote another letter for refund of the money (though this letter is a little confused, the purport of it is quite clear). Even after this the Coal Commissioner continued to take the stand that no wagons could be allotted (see Ext. D. 3) but now there was no reference to the coal having to be consumed locally. Instead, it was said that the Director of Industry, C.P. and Berar was requested to assist in the disposal of this coal locally. On 24th September (see Ext. P. 6) the Chief Engineer of the Bengal Nagpur Railway wrote to the Coal Commissioner to arrange for allotment of the requisite wagons for transport of the coal. A copy of this was sent to the Financial Adviser and the Chief Accounts Officer to let him know if the amount of purchase was refundable. The Chief Engineer also wrote to the appellant on 20th October, 1949 that the Coal Commissioner was not in a position to allot wagons and that he had moved the Director of Industry, C.P. and Berar to assist in the disposal of the coal locally. This apparently refers to letter (Ext. D3) from the Coal Commissioner to the Chief Engineer, already referred to. It would thus be clear that till that date there was no offer of facilities for transport.7. Having exhausted all efforts the appellant ultimately issued a Lawyers notice on 7th November, 1949 giving the history of the whole case and how the Coal Commissioner had arbitrarily refused the movement of the coal and how the Minister of Industries had advised him to apply for cancellation of the auction sale and to ask for refund of his money. He had also stated therein that he had enquired from the District Engineer before purchasing the coal whether the Railway would afford reasonable facility for the movement of the coal to Ferozabad and that the District Engineer had assured him that they would do so. Whether this part of the statement found in the notice is correct or not, it is obvious that in the circumstances of this case the appellant would not have bid at the auction at all if he had been told that the coal would not be allowed to be moved out of Kumhari and no wagons would be provided for its transport. As suggested in the letter of the Minister of Industries and Supply, already referred to, that would be the most reasonable thing to do and in any case there was nothing unreasonable in appellants assuming that he would be allowed to remove the coal from Kumhari to Ferozabad and proceeding on that basis. Nobody did anything to dispel that impression. This is unfortunately a case of lack ofbetween one arm of Government and another and one of the arms, i.e. the Coal Commissioner putting all obstructions in the way of other arm performing its functions. We see from Ext. P. 8 that the Private Secretary to the Minister wrote to the Coal Commissioner asking him to take personal interest in the matter and to arrange for refund, and the appellant was also informed with reference to his notice sent through his Lawyer datedthat the matter was receiving attention. Even on 19th November, 1949 the Coal Commissioner wrote to the Chief Engineer, Bengal Nagpur Railway that it was not possible to allot wagons and that arrangements may be made for the cancellation of the sale and refund of the amount as advised by the Ministry of Industry and Supply (see Ext. P. 9) and the Chief Engineer wrote to the appellant onmore than a year after the appellants successful bid, referring to the above letter from the Coal Commissioner, and informing the appellant that action was being taken as instructed by the Coal Commissioner, to dispose of the appellants case promptly. After all this, on 22nd December, 1949 Secretary to the Coal Commissioner wrote to the Chief Engineer that it was then possible to allot wagons for the movement of coal provided the auction purchaser was still interested in the movement of such coal. As would be apparent from the narration of the facts so far, this offer came too late. But it is interesting to note that it is on this letter that much of the defence to the appellants suit was relied upon. We have no hesitation in holding that by this time everybody, including the Ministry, the Railways and the Coal Commissioner had proceeded on the basis that the coal could not be removed from Kumhari and that the sale was to be cancelled and the appellants money refunded, and this letter will not in any way affect his claim. The appellant, therefore, rightly wrote on 9th January, 1950 that he was not in a position to take delivery of the coal and expressing his surprise at the offer to allot wagons at that stage, and asked for refund of his money immediately. He again wrote to the General Manager, Bengal Nagpur Railway onasking for refund in accordance with the letter from the Ministers Private Secretary dated 9th November, 1949, already referred to. It is interesting to note that somewhere in between the appellant had gone to the office of the Secretary, Railway Board and was told that the file relating to this matter had been lost and he therefore had sent copies of various correspondence (see Ext. P. 17). The Secretary, Railway Board, wrote an express letter on 19th February, 1951 to the General Manager, Bengal Nagpur Railway pointing out that the matter had been pending for more than two years and that information may be furnished without further delay. The951 the appellant sent a notice apparently under Section 80 of the Code of Civil Procedure, and received a reply onthat according to the terms of the auction sale the Railway Administration was not liable to refund the purchase money, in spite of the fact that the Coal Commissioner issued a directive to the Bengal Nagpur Railway to refund the same. It is, therefore, clear that the Railways were avoiding responsibility for what had taken place and the appellant, therefore, filed the suit out of which this appeal arises. The learned Additional District Judge decreed the appellants suit but denied him the interest. The respondent filed an appeal to the High Court and the appellant filed a memorandum of cross objections in respect of his claim for interest which was disallowed by the lower Court. The High Court allowed the appeal and dismissed the appellants cross objections and this appeal has been filed by the appellant.9. This elaborate narration would make it clear that the appellant had bid for the coal under the honest and reasonable impression that he would be allowed to transport the coal to Ferozabad, that this was thwarted by the attitude of the Coal Commissioner, that later on the parties proceeded on the basis that the auction sale was to be cancelled and the appellant refunded his money. But apparently because by that time much of the coal had been lost and the Railways would have been in difficulty to explain the loss they chose to deny the appellants claim. We can see no justification on facts for such a denial and the defendants cannot refuse to refund the plaintiffs amount. The contract had become clearly frustrated. We must make it clear that we are not referring to the refusal to supply wagons but the refusal of the Coal Commissioner to allow the movement of coal to Ferozabad in spite of the fact that it was not one of the conditions of the auction. The appellant is, therefore, clearly entitled to the refund of his money. Furthermore, the contract itself not being in accordance with Section 175 of the Government of India Act is void and the appellant is entitled to the refund of his money. We are unable to understand the reasoning of the High Court when it proceeds as though the appellant was trying to enforce the contract. We can see no justification for the lower Court refusing to allow interest for the plaintiffs amount at least from the date of his demand, or the latest from the date of suit.