TMI Blog1963 (3) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... frames and window frames (Chaukat), etc., and shutters of hard and soft wood. The second defendant submitted his tender in his business name of Captain S. Kirpa Ram and Sons for C.P. Teak wood, Deodar and Kail. In the month of February, 1948, the Government made a new proposal to defendant No. 2 to make the entire supply in teak wood if he would charge at the lowest rates which had been tendered by different tenders. An agreement was thus brought about and the agreement form was signed by defendant No. 2 on 27th of July, 1948. On behalf of the Governor-General of India in Council, the Chief Engineer signed the agreement on 18th December, 1948 (vide Exhibit D.I.). Under this agreement the second defendant was to use C.P. Teak wood but in February, 1949, the terms of the contract were changed and defendant No. 2 was to execute the contract partly in Teak wood and partly in Deodar wood. The reason alleged for this change was that there was considerable difficulty in procuring railway wagons for transport of Teak wood from the Central Provinces. By this change the quantity of Teak wood to be supplied was reduced to 5,58,000 square feet. To distinguish this contract from other contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obligations and priority permits were given for 125 railway wagons only out of 235 wagons which were needed. Out of these only 58 wagons were secured and up to 15th of November, 1948, only 6 wagons had been provided. It was also alleged that electric connections were procured after considerable delay. Despite the handicaps the plaintiffs managed to manufacture 1,14,553 square feet of Chaukats, shutters, etc., out of which 89,506 square feet of finished stores were tendered to and accepted by the C.P.W.D., leaving 25,047 square feet of finished stores lying with the plaintiffs ready for delivery. The details of the quantity tendered and of the quantity left over are given in Annexures 'B' and 'C', respectively. 5. The plaintiffs contend that the Government raised obstacles in the execution of the contract by making deductions from the bills for stores supplied. This was done in satisfaction of the claim on account of alleged arrears of income tax for the year 1942-43 from defendant No 2. Deductions were also made on account of the amount claimed by the Delhi Improvement Trust as rent of the site of the factory works at Rs. 2,000 per mensem and also on account of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm than Messrs Kirpa Ram and Sons, of which Captain Kirpa Ram was the sole proprietor, turned out to be unavailing. A telegram dated 26th of August, 1949, of protest was sent to Executive Engineer, Chief Engineer, C.P.W.D., New Delhi, and also to Secretary, Works, Mines, Power, Government of India (vide Exhibit P. 21). This was followed by a detailed notice under Section 80 of the Code of Civil Procedure, dated the 30th of August, 1949. It is alleged that taking advantage of the fact that the plaintiffs could not institute a suit before the expiration of the statutory period of two months, the first defendant set up another contractor Rai Bahadur Jodha Mal in respect of the Deodar wood-work and started using the plaintiffs' machinery, plant, etc., and continued to use it for some three months up to the end of November, 1949. This was done contrary to law. The manufactured stores lying at the site were removed. The value of logs, seasoned wood, manufactured Chaukats and manufactured shutters, as detailed in Annexure 'C', comes to Rs. 1,47,730-12-0. After the contract of defendant No. 2 had been illegally put an end to, the plaintiffs were entitled to remove the materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as claimed by the plaintiffs, were not denied, but the price of the finished goods as claimed by the plaintiffs was not accepted. The Government maintained that the forfeiture of the security deposit and payment of the amount together with 25 per cent of the running bills to the income tax authorities against income tax due from defendant No. 2 was in accordance with law. These were in the nature of Crown debts and were recoverable as arrears of land revenue. Recovery on account of rent for the site of the factory payable to the Improvement Trust was validly made. It was also claimed that the factory, machinery and other tools, etc., lying on the works were lawfully seized under the agreement. The contractor had failed to execute the contract within the stipulated time of 10 months from the date of commencement of work which, according to defendant No. 1, was 19th of April, 1948. It was stated that the property seized had been measured and mentioned in inventories prepared in the presence of the representatives of the contractor and it was also said that necessary credit for the same would be given to defendant No. 2. The trial Court framed the following issues:-- (1) Did the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsence of any privity of contract the relief was not available to the plaintiffs against the first defendant. 10. On the first issue it was found that the plaintiffs Nos. 1 to 4 had invested a sum of Rs. 3,28,000 approximately in this business and the contribution of plaintiffs Nos. 6 and 7 came to Rs. 45,000, the total being Rs. 3,73,000. This finding has not' been contested before us and it is, therefore, unnecessary to refer to the evidence on the basis of which this conclusion was arrived at. The second issue was decided against the plaintiffs on the principal ground that the rights which had been reserved under the agreement of partnership between the plaintiffs and defendant No. 2 were not operative against the Government, defendant No. 1. It may be mentioned that the partnership agreement (Exhibit P. 17) was executed on 30th of August, 1948. Defendant No. 2 had already submitted his tender form duly signed on 27th July, 1948. It is, however, true that on behalf of the other contracting party, the Governor-General of India, the contract was signed by the Chief Engineer on 18th of December, 1948. Plaintiff No. 6 as the attesting witness of the tender had set down his si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been given to the Divisional Officer and they are not confined to the tools, plant, material and stores, etc., belonging to the contractor, but to all such things which are upon the works or on the site even if they are the property of a third party. One of the principal grounds canvassed in this case is that the property, which had been taken possession of by the Government, belonged to the plaintiffs and not to defendant No. 2 and had been brought there by the plaintiffs and as such was not liable to seizure in accordance with the terms of the contract as between the two defendants by reason of the fact that the plaintiffs were no party to that contract. 12. On the third and fourth issues the trial Court expressed the view that the seizure was contrary to the terms of the contract. Clause 2 of the conditions of contract (Exhibit D. 1) provides that the time allowed for carrying out the work, which was ten months, shall be reckoned from the date on which the order to commence work is given to the contractor . The contract was to be carried out with due diligence, time being the essence of the contract on the part of the contractor, and in the event of delay the contractor w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty unless extension is granted to him for which he should apply forthwith to enable the office to regularise the issue. 13. The letter of the contractor, to which reference was made by the Superintending Engineer in Exhibit D.W. 1/6, is dated 3rd December, 1948 (Exhibit D. 2). Paragraph 3 of that letter runs as under:-- In April, 1948, the Government of India awarded the whole work to us,--vide your letter No. CE/WS/253-Const., dated the 12th April, 1948, on the basis of the lowest tender rates. The above lines contained no admission of the contractor and the Superintending Engineer was not, therefore, justified in arbitrarily communicating the date of commencement as 19th of April, 1948. This communication was made for the first time almost a year later on 5th of April, 1949. Instead of giving him 10 months prospectively after communicating the date of commencement he was informed under the endorsement that the period of completion had already expired. In other words, the communication of the date of commencement of the work was made when the period of 10 months had already expired. This is extremely arbitrary and irregular. I agree with the trial Court that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contractor, defendant No. 2, did not fail to execute the work within the time allowed under the contract Though no default had been committed and the breach had been on the side of the Government, the plaintiffs have been denied relief on the ground that they were strangers to the contract and, therefore, could not get the matter referred to arbitration. No finding on the merits was given on issues Nos. 7 and 8 for the same ground that the plaintiffs were outsiders. On the 9th issue also the trial Court held that the matter could be agitated at the instance of the contractor only. It was admitted that the machinery had been made over to the other contractors including Rai Bahadur Jodha Mal for the execution not only of this but also of other contracts. The compensation for wrongful user and seizure, according to the trial Court, is payable to the contractor only if the matter had been taken up by him. On the 10th issue it has been held that the plaintiff cannot agitate the quantum of compensation. On the 11th issue the trial Court found that the value of extra items taken over by the Government was approximately Rs. 94,000. The value of the property according to the plaintiffs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 948, and by the representative of the Governor-General in Council on 18th December, 1948, had created contractual relationship as between the two defendants and the plaintiffs were strangers to the contract. That being so, the plaintiffs could not apart from certain well-known exceptions--claim any benefit or suffer any liability under the contract. Both sides before us have argued their respective cases on the basis that there is no privity between them. 15. It has further to be made clear that according to the terms of the partnership entered into between the plaintiffs and defendant No. 2 on 30th of August, 1948, the entire undertaking was of the plaintiffs without any contribution whatsoever from defendant No. 2 and his interest was confined to profit of 4 annas 3 pies in the rupee. The terms of this partnership had been communicated to the C.P.W.D., authorities and they are presumed to be aware of its terms and no objection whatever was raised on the ground that the contract was being assigned or that the work was being sublet. Clause 21 of the conditions of contract provides that the contract shall not be assigned or sublet without the written approval of the Divisional Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ravention of any term of the contract. Another contention Which was advanced on behalf of the Government was that though the property taken possession of was of the plaintiffs and the seizure was wrongful, remedy was available to Kirpa Ram alone and it was not open to the plaintiffs to contend that the terms of the contract had been violated. It was also urged that the plaintiffs were consenting party to the contract and, therefore, they were in no better position than Kirpa Ram. It was said that the rule of Volenti non fit injuria was an effective answer to the plaintiffs' claim. 16. I may now consider the implications of the rule underlying the doctrine of privity of contract, which means the relationship subsisting between two contracting parties. Privity in this context implies a mutuality of will and is an interaction of parties and their successors. It creates a legal bond or tie or a vinculum juris. The rule of privity of contract is that no one but the parties to a contract can be bound by it or entitled under it. In the words of Pollock-- A third person cannot become entitled by the contract itself to demand the performance of any duty under the contract. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... handra Mondal v. Dolgobinda Das A.I.R. 1936 Cal. 663, Babu Ram Budhu Mal and others v. Dhan Singh Bishan Singh and others A.I.R. 1957 Punj. 169, Abdul Ghafur Butt v. Mohammad Salim and others (1950) 52 P.L.R. 117, and A.R. Iswaram Pillai v. Sennivaveru Taragan and three others (1915) I.L.R. 38 Mad. 753. This is, however, not a case in which the plaintiffs as strangers are claiming benefits of the contract. The plaintiffs' contention is that in a contract between the Government and Captain S. Kirpa Ram the contracting parties cannot impose a liability on the plaintiffs who are strangers to the contract. Their contention is that Captain S. Kirpa Ram by agreeing to clause 4 of the conditions of the contract, whereby it was open to the Divisional Officer to take possession of all tools, plant, materials and stores in or upon the works or the site not only belonging to the contractor but also procured by him and intended to be used for the execution of the work, could not impose a liability upon the plaintiffs or any other stranger and thereby put in jeopardy their property. The plaintiffs contend that on the strength of the terms of the contract the Government could not claim a rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has contended that the partnership entered into between the plaintiffs and Captain S. Kirpa Ram was with a view to exploit the undertaking covered by the contract between him and the Government. The contract had not been signed on behalf of the Government till 18th December, 1943, and the partnership has been effected on the 30th of August, 1948. It was, however, assumed in the partnership that the contract, which had been signed by Captain S. Kirpa Ram, was a good contract and the work had been commenced in pursuance of the same. The contention before us is that the plaintiffs who were aware of the contract are deemed to have knowledge of the terms owners and otherwise contained therein and when they entered into the partnership they are deemed to have assented to the liabilities which Captain S. Kirpa Ram had undertaken to incur. The principle underlying the maxim is that where a damage is suffered by consent it does not give rise to a cause of action or that a man must bear loss arising out of the act to which he has assented. Assuming that the plaintiffs had knowledge of clause 4 of the terms and conditions of the contract (Exhibit D. 1) that would not mean that they consen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment in the exercise of colourable right under contract with Captain S. Kirpa Ram was illegal even qua Captain S. Kirpa Ram and not sanctioned by the terms of the contract. In Exhibit P. 19, letter addressed by the Executive Engineer to Messrs R.S. Kirpa Ram and Sons, dated 16th of August, 1949, it was said that the date of commencement of work was 19th of April, 1948, and ten months were allowed for completion of the work and by failing to comply with clause 2 of the agreement the contracting party had rendered itself liable to pay compensation. In this letter he also referred to taking possession on 18th August, 1949, of all tools, plant, materials and stores in or upon the above work or the site. The trial Court had rightly found that there was nothing to show that any such date for the commencement of the work had been fixed and much less communicated to the contractor before the term under the contract had started running against him. The contractor had written to the Executive Engineer to confirm the date of commencement of the work was 15th of January, 1949. (Vide Exhibit D. 4). The Executive Engineer wrote back in reply on 18th March, 1949, saying that the issue regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate relief where all the facts are stated in the plaint and supported by evidence and the matter has been raised before and considered by the trial Court. There is no element of surprise and on that account the first defendant has not been prejudiced in any way. On the proved facts on the record the tort of conversion has been committed against the plaintiffs and the fact that the plaintiffs are no privy to the contract would not disentitle them from recovering damages for the wrongful act of conversion. The plaintiffs are entitled to relief not only on the ground of breach of contract to which they were not parties but for the reason that while seemingly enforcing the contract the Government wrongfully took possession of the monies and property which belonged to the plaintiffs. In this case, even if the monies and property belonged to the contractor these could not be seized under the contract as Captain S. Kirpa Ram had not violated any of its provisions. The date for commencement of the work under clause 2 could not be fixed by either party and the time under clause 2 was required to be reckoned from the date when order to commence work was given and in this case no such order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Bahadur Jodha Mal in respect of the tools, plant and machinery, etc. The claim appears to be exaggerated. It does appear that the factory was given to another contractor and charge was made at the rate of Rs. 30 per day per saw. The saw was used for a period of 4 months and 3 weeks beginning from 18th of August, 1949, till the date of the suit, that is 10th of January, 1950. On this basis the total comes to Rs. 4,200 to which the plaintiffs should be entitled. The next item is of Rs. 8,300 which is being claimed as interest on capital amounting to Rs. 3,50,000 invested and blocked up at 6 per cent from 18th of August, 1949 to 14th of January, 1950. The trial Court has found that the plaintiffs Nos. 1 to 4 had invested a sum of about Rs. 3,28,000 and plaintiffs Nos. 6 and 7 had invested another sum of about Rs. 45,000. The total investment comes to Rs. 3,73,000, but in the plaint interest is being claimed on an investment of Rs. 3,50,000. The claim of Rs. 8,300, therefore, stands proved and the plaintiffs are entitled to it. The result, therefore, is that out of the three amounts comprising Rs. 21,580, the plaintiffs are entitled to two amounts of Rs. 4,200 and Rs. 8,300 only, mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, 1950, it is stated that the rates have been provided according to the market value on the date of taking possession of the materials less the recovery shown for demolishing at the end of the statement. The statement refer red to is Exhibit P.W. 3/5A. Under the 6th column of that statement it is indicated that the rate against each item has been arrived at by working out on the market rates. Shri O.P. Mohindra has also appeared as D.W. 1 where he stated that the price of the articles taken over by the Government was assessed by him and was forwarded to the Government of India and has referred to the estimate of the valuation Exhibit P.W. 3/5A. This evidence does not give any indication as to what the prevailing market rate was at the time and how it has been determined. I would in the circumstances accept the testimony of P.W.s 6, 10 and 11 which has not been rejected by the trial Court and hold that the prevailing market rate of Teak wood was Rs. 7 per cubic foot. I would, therefore, allow to the plaintiffs compensation in the sum of Rs. 1,47,730-12-0 as claimed by them. 26. In paragraph 31(c) the petitioner has prayed for the grant of permanent injunction directing defendant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Malik Khan Chand A.I.R. 1923 Lahore 255, that although declaratory decrees are asked for, the plaintiffs can be given decrees for possession of the land if they pay the Court fees required for possessory suits. In Mehar Chand v. Milkhi Ram and others A.I.R. 1932 Lahore 401 (411), the Full Bench expressed the view that the pleadings of the parties should not be too strictly construed and that it was the duty of the Courts to mould the relief to be granted to the plaintiff according to the facts proved which, however, should not be inconsistent with his pleadings. 27. In Dhani Sahu and others v. Bishan Prasad Singh and others A.I.R. 1942 Patna 247, Fazl Ali, J., sitting in Division Bench, expressed the view that a plaintiff ought to be given such relief as he is entitled to get on the facts established upon the evidence in the case even if the plaint does not contain a specific prayer for that relief. I, therefore, allow to the plaintiffs as damages a sum of Rs. 90,977-3-0 under this head, but the plaintiffs will not be entitled to execute the decree under this head without paying court fee on the amount of Rs. 90,977-3-0. As the plaintiffs are being allowed a decree for damages f ..... 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