Case: Mulamchand Vs. State of Madhya Pradesh

2. The appellant had purchased a right to pluck, collect and remove the forest produce like lac, tendu leaves etc. from the proprietors of the different Malguzari jungles for the years 1951, 1952 and 1953 as detailed in Sch. A attached to the plaint. This right he had acquired before the proprietary rights in those forests came to vest in the State of Madhya Pradesh under the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act. 1950 (Act No. 1 of 1951), hereinafter called the Abolition Act and the right was to be enjoyed by the appellant after April 1, 1951 on which date the proprietary rights came to vest in the State of Madhya Pradesh. It was alleged by the appellant that the Deputy Commissioner of Balaghat acting under Section 7 of the Abolition Act took charge of the entire Malguzari jungles on April 1, 1951 and prevented the appellant from enjoying the rights he had already acquired. In the month of April, 1951 the Deputy Commissioner auctioned the forest produce of villages covered under the purchases of the appellant. Out of the forest produce only the tendu leaves crop for the year 1951 was allowed to be enjoyed by the appellant on his depositing a sum of Rs. 3,000/- in the Government Treasury, Balaghat under a written permit dated April 30, 1951. The deposit was made by the appellant to save the tendu leaves crop of 1951 from being sold to others by the Deputy Commissioner of Balaghat. The case of the appellant was that he was entitled to the refund amount as the right to collect tendu leaves for the year 1951 had already been purchased by him. Similarly, the appellant claimed refund of the amount of Rs. l 0,000/- which he was required to deposit towards the right to collect lac from those forests for the years 1951, 1952 and 1953. The refund was claimed on the basis that there was no valid contract between the appellant and the State of Madhya Pradesh as the provisions of Art. 299 of the Constitution were not complied with and the contract was void. The respondent contested the suit mainly on the ground that the Deputy Commissioner, Balaghat had validly taken charge of the Malguzari jungles under the provisions of the Abolition Act and the appellant having removed lac from the jungles on the basis of the contract, was not entitled to any refund. The trial Judge held that the appellant was not entitled to claim the refund of the sum of Rs. 10,000/-, firstly on the ground that the contract was good even though not in conformity with Art. 299 of the Constitution, and secondly, because the appellant was allowed to enjoy the right of collecting lac and the appellant actually availed himself of that right. As regards the appellants claim for damages for breach of contract, the trial court was of the view that the contracts were mere licences and enforceable against the State of Madhya Pradesh even after vesting of the proprietary interests under the Abolition Act. Acting in accordance with the view expressed by this Court in Chhotabhai Jethabai Patel and Co. v. The State of Madhya Pradesh, 1953 SCR 476   = (AIR 1953 SC 108  ) the trial court held that the appellant was entitled to enforce the contracts against the State of Madhya Pradesh and was consequently entitled to damages for breach of the contracts. The trial court accordingly gave a decree in favour of the appellant to the extent of Rs. 57,281/- and dismissed the rest of the claim of the appellant. The State of Madhya Pradesh took the matter in appeal to the High Court of Madhya Pradesh. The appellant also preferred an appeal to the High Court with regard to the claim which was disallowed by the trial court. By its judgment dated March 21, l961, the High Court allowed the first appeal of the respondent and set aside the decree of the District Judge in Civil Suit No. 24-B of 1954 and dismissed the entire suit. The appeal preferred by the appellant was also dismissed. The High Court took the view that the decision of this Court in 1953 SCR 476 = (AIR 1953 SC 108  ) was overruled in a later decision of this Court in Mahadeo v. State of Bombay, 1959 Supp (2) SCR 339 = (AIR 1959 SC 735  ) and in contracts similar to those of the present case it was held that there was a transfer of proprietary rights in the estates to the grantees and the effect of the Abolition Act was that all such proprietary rights vested in the State with effect from April 1, 1951 free from all encumbrances and the State could therefore lawfully exclude the grantees from enjoying any such rights secured to them under the contracts.

Court's reasoning:
6. In our opinion, the reasoning adopted by the trial court and by the High Court for rejecting the claim of the appellant is not correct. It is now well established that where a contract between the Dominion of India and a private individual is not in the form required by Section 175 (3) ofthe Government of India Act, 1935, it was void and could not be enforced and therefore the Dominion of India cannot be sued by a private individual for breach of such awas stated in that case that under Section 175 (3) ofthe Government of India Act, 1935, 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 (c) to be executed by officers duly appointed in that behalf and in such manner as the Governor-General directed or authorised. The evidence in the case showed that the contracts were not expressed to be made by the Governor-General and were not executed on his behalf. It was held by this Court that the provisions of S. 175 (3) were mandatory and the contracts were therefore void and not binding on the Union of India which was not liable for damages for breach of thethe principles to the present case, it is manifest that the appellant would have been entitled to compensation under Section 70 of the Indian Contract Act if he had adduced evidence in support of his claim, but the trial court has examined the evidence on this point and reached the conclusion that the appellant did collect lac in the jungles in the year 1951 but later on abandoned the working of his own accord. It is well established that a person who seeks restitution has a duty to account to the defendant for what he has received in the transaction from which his right to restitution arises.In other words, an accounting by the plaintiff is a condition of restitution from the defendant (See Restatement of the Law of Restitution, American Law Institute, 1937 Edn., p. 634). The appellant did not produce sufficient evidence to show to what extent he worked the contract and what was the profit made by him in the year 1951 and the succeeding years. In the absence of reliable evidence on this point the appellant was not entitled to restitution or refund of the deposit he had made. The case of the appellant with regard to this part of his claim was therefore rightly disallowed both by the trial court and the High Court and the respondent is therefore not liable to refund the amount of deposit.