Tarkeshwar Nath, J.:— This appeal by the State of Bihar (defendant) arises out of a suit for recovery of Rs. 98528/- as principal and Rs. 17241/14/- as interest from August 1953 to June, 1956 at the rate of 6 per cent per annum.
2. Plaintiff was a partnership firm carrying on Business at various places including Sindri. There is a factory at Sindri for manufacture of fertilizers and it isknown as Sindri Fertilizer Factory. By a notice dated 13-8-1946, the Government of Bihar through the Executive Engineer, Sindri water Works Division of the Public Health Engineering Department invited tenders from contractors desiring to execute the works for settling tank and ancillary works for water supply to the Fertilizer factory at Sindri the plaintiff submitted tender for the said works and that tender was accepted by the Government of Bihar. By an Indenture of agreement dated 1/23rd April, 1947, between the plaintiff and Governor of Bihar the latter appointed the plaintiff as contractor for the purpose of executing the works of settling tank and ancillary works at Sindri on terms and conditions mentioned therein. The Superintending Engineer Public Health Department, executed that agreement and he had full authority to do so on behalf of the Governor of Bihar. While the saw work was proceeding, the Central Government in the Ministry of Labour increased the wages of labourers in the coal mining area by a resolution published in the Gazette of India extraordinary date 12-5-1947. Sindri was within the ambit of the coal mining area and thus the plaintiff had to pay wages at the increases rates to the labourers employed in those works accoraing to the said resolution. The rates in the aforesaid indenture of agreement were settled on the basis of then prevailing rates of wages but they were much lower than the wages fixed by the said resolution. The plaintiff explained an these facts before the Superintending Engineer, Public Health Engineering Department, Government of Bihar, and expressed inability to execute the said works in the altered circumstances brought about by the said resolution, appreciated the plaintiffs difficulties and promised to pay the plaintiff additional sums so that the plaintiff might pay increased wages to the labourers employed in those works. The plaintiff completed those works to the satisfaction of the authorities concerned and thereafter submitted a claim for further and additional amount which had been spent in order to pay the increased wages, the Chief Engineer or the Public Health Department scrutinised that claim and fixed it at Rs. 98528 only. The said wuet tngmeer as representative and agent of the State of Bihar acknowledged the plaintiff's right to get that sum in his letter dated 30-7-1953 addressed to the Managing Director Sindri Fertilizer and Chemicals Ltd.
3. A copy of that letter was forwarded to the plaintiff as well. The employees and the agents of the defendant promised to pay that sum to the plaintiff, but in spite of repeated demands the defendant failed and neglected to pay that amount to the plaintiff. The plaintiff sent a notice under Section 80 of the CPC and then instituted this suit on 30-8-1956 for the recovery of a total sum of Rs. 1,15,769/14/- (the amount of principal and interest) and made a prayer for pendente lite and future interest as well.
4. The defendant took several pleas and one of them was that the defendant had acted only as an agent for and on behalf of the Union of India to execute the said works for water supply to the Fertilizer at Sindri which was a concern of the Government of India and in those circumstances, the suit was not maintainable unless the Union of India was made a party to it. Another plea was that the suit was barred by limitation as the work was completed prior to three years before the institution of the suit. The defendant admitted the contract and the agreement in question, but contested the claim of the plaintiff with regard to the additional sum claimed for paying increased amount of wages to the labourers. The defendant's case was that the said resolution of the Central Government dated 12-5-1947 did not apply to the Sindri Factory and to the work of construction connected therewith. The defendant did not admit that the plaintiff had to pay increased rates to the labourers in terms of the aforesaid resolution of the Central Government. The superintending Engineer did not promise to pay any further and additional sum to the plaintiff on account of the increased rates of wages. With regard to the letter of the chief Engineer, the position, according to the defendant, was that the recommendation of the Chief Engineer for payment of Rs. 98528 as ex-gratis payment was not accepted by the Central Government. The contract in question was binding on the plaintiff and any claim for an additional amount was not tenable.
5. Issue No. 4 related to the defect of the parties and issue No. 5 was with regard to limitation, and Issue No. 6 was as to whether there was any agreement Between the plaintiff and the defendant making the latter liable for payment of the amount claimed. The Subordinate Judge of Dhanbad held that there was no defect of the parties and the Union of India was not a necessary party of the suit. He found that there was an agreement between the plaintiff and the defendant so as to make ties latter liable for payment of the amount claimed. He took the view that the suit was not barred by limitation, to view of this finding, he decreed the suit in part for Rs. 98528 only with proportionate costs. But did not allow any interest. Hence the defendant has preferred this appeal, whereas the plaintiff has preferred, a cross-objection was regard to interest.
6. Learned Additional Government Pleader at first urged that the defendant was not responsible for ins payment of the extra labour charges which the plaintiff alleged to have paid to its employees for the work in question. He submitted that the resolution dated 12-5-1947 (exhibit-E) of the Government of India was neither applicable to the workers of the Sindri factory mi to the work of construction connected therewith. He relied on the terms of the resolution themselves in support of his submission. The relevant portions of the said resolution are as follows:
“The Government of India have had under their review for sometime past the necessity to bring (Hit an improvement in the conditions of workers in the coal mining industry. The report of Mr. Deshpande on the conditions of the labour in the coal fields undertaken as pars of a general investigation into labour conditions in the country, emphasised the need for formulating and implementing a positive policy in regard to the wages of colliery works so as to facilitate the development of are efficient, contented and settled labour force in the coal fields. The report of the Indian Coal fields committee also stressed the importance of securing fair wages to coinery workers. The Government of India announced in December 1946 the formation of the committee to enquire into the basic wages of colliery workers and to make recommendations on what should be considered as reasonable wages for the different categories of workers in the coal fields. Before the committee could assemble the situation in collieries had deteriorated considerably; and as breakdown in coal production would have had serious repercussions on other industries, the Government of India constituted a Board of Considerations under the Trade Dispute Act 1929 for promoting settlement of the dispute existing or apprehended in the coal fields of Bengal and Bihar the Board have now submitted their report. The report is published as required under Sections 12 of the Trade Dispute Act, 1929 (VII of 1929).”
7. Thereafter, the recommendations of the Board which felt into three groups were mentioned. In that resolution ants lastly the existing scale and the proposed scale of wages were mentioned in that resolution, it appears from exhabit E that the Government wanted to give certain Benefits to the colliery workers in the shape of increment in wages and dearness allowances. It is true that the position was examined with a view to give certain advantages to the workers in the colliery but the committee was formed to bring about an all-round improvement in the conditions or the workers in the Coat Mining Industry. The resolution ire terms will not apply, but the conditions having changed, the plaintiff followed the spirit of the resolution and paid extra wages to the various employees and workers, in contention of the learned Additional Government pleader is undoubtedly correct that the plaintiff cannot succeed in the present action merely on the basis of this resolution, but it is important to ascertain as to what happened after the resolution. Plaintiff's case rs that higher rates of wages were paid to the labourers and the superintending Engineer was apprised about it. He agreed to pay the higher rule of wages and the plaintiff filed a claim for Rs. 203276/14/- on this score.
8. The Chief Engineer, Public Health Engineering Department finally decided by his letter dated 30-7-1953 that the plaintiff was entitled to sum of Rs. 98523 only on tms score. I get all this from the evidence of Khem Chand (P.W 3) who holds a power of attorney for the plaintiff. The only witness examined on behalf of the defendant is Ram Rachchya Singh (D.W 1). At the time of his deposition, he was Head Assistant of the Technical Adviser and Chief Engineer, Hathia Project, and he stated in the examination-in-chief that Government of India had increased the rates of wages of such labourers who were engaged in coal mining industry. He made out that neither the Government of Bihar nor its officers ever agreed to pay the plaintiff a sum of Rs. 98,528 in excess of the sum of money agreed to earlier and the plaintiff did not submit the account books to the officers. In cross-examination, he admitted that the Chief Engineer suggested to the Government of India that a sum of Rs. 98,528/- should be paid to the plaintiff as ex-gratia payment, appears that he was not posted at Sindri at any point or time and his statements in Court were partly based on some records maintained in his office and partly on the discussions which he had with his officers after the institutions of the suit.
9. He not being at Sindri at any point of time, his evidence is of no assistance to the defendant either about the contract or about the additional claim made by the plaintiff. The plaintiff has placed great reliance on the correspondence which it had with the various officers from time to time. On 14-7-1948, Knem Chand sent a letter, exhibit 1(a), to the Superintending Engineer, public Health Engineering Department, Patna, stating inter alia that when the work started, the rates for the labourers were 15 annas per day and that of mason Rs. 2/4/- per day, but from March 1947 the Government of India had increased the rate and labourers were being paid at the increased rate. He further mentioned that the Central Public Works Department at Sindri was considering the question of allowing certain percentage over and above the contract rates due to the increase in the rates of the wages. On 26-12-1952 the plaintiff sent a letter, exhibit 1(b), to the Consruction engineer reminding him that in course of several discussions with him and the Superintending Engineer, they were pleased to observe that the claims for increment of rate would be favourably considered only when the Central Public Works Department would agree to allow an increment.
10. The plaintiff made a grievance that the matter was pending since long and the decision should be excedited. On 15-1-1953, the plaintiff pointed out to the Construction Engineer by a letter, exhibit 1(c), that the claims made by Telu Ram Jain for increased labour rates had been allowed by the Central public Works Department in the connection with the Fertilizer Project at Sindri and as such, the pending claim of the plaintiff as well should be allowed. On 3-3-1953, Chief Engineer, Public Health Engineering Department, Bihar, made an enquiry from the chief Engineer, Central Public Works Department, New Delhi, by a letter, exhibit 1 k), as to whether the claim of Telu Ram Jain contractor in respect or the increased rate of wages was allowed in view of the resolution dated 12-5-1947. On 11-5-1953 the Chief Engineer asked the plaintiff by a letter, Ext. 1(m), to furnish the details of the claim amounting to Rs. 1,02,000/- on 1-7-1953, the plaintiff sent a letter, exhibit 1(d), to the Chief Engineer, Public Health Engineering Department, Bihar, giving details of the claims in connection with the work of settling tank at Sindri due to increase in, the wages of labour. It appears from this letter that the total claim was in respect of Rs. 2,03,274/14/-.
11. By a letter exhibit 1(1) dated 15-7-1953, the executive engineer submitted to the chief engineer, Public Health Engineering Department, the details of Rs. 113,824/- which was the amount of increase due to the increase of labour rate in the coal field area. He recommended that the claim of the contractor (plaintiff) to this extent should be paid as against the demand of Rs. 2,03,532/-. A copy of this was forwarded to the plaintiff for information. He gave the various details and the figures in support of this recommendation, next comes the important letter, exhibit 1(f) dated 30-7-1953 sent by the Chief Engineer, Public Health Engineering Department, Bihar to the Managing Director, sindri Fertilisers and Chemicals Ltd. with regard to the claims of the plaintiff in connection with settling tank works. In paragraph 2, the Chief Engineer stated as follows:
“On the basis of ex-gratia payment made to Sri L. Telu Ram Jain for works carried out by him at Sindri the claim of Thawardas Pherumal for the above noted work amounts to Rs. 98,528/- which is due to rise in the wages of labour of Coal Mining area resulted from the Resolution of the Government of India, Ministry of Labour, as published in the Gazette of India, extraordinary dated 12-3-47 under their number LR (103).”
12. He sent the estimate in question for necessary action and communication of the approval at a very early date for enabling him to award the claim of the contractor, a copy of this letter was forwarded to the plaintiff for information, this letter is the sheet anchor of the plaintiff's case, on 10-9-1953, the plaintiff sent a letter to the Chief engineer, vide exhibit 1(e), for payment of Rs. 98528 within a fortnight of the receipt of that letter. On 11-7-1956, the Under Secretary to the Government of India sent a letter, exhibit A(2), to the Secretary to the Government of Bihar, Public Health Engineering Department, patna, with regard to claim lodged by the contractor on the account of rise in labour wages. This letter was in respect o? various claims and it refers to the claim of the plaintiff to the tune of Rs. 98528/-. The Under Secretary pointed out that neither the Sindri Fertilizers and Chemicals Ltd. nor the Government of India was a party to any settlement acquiescing in the Justness of the claim amounting to Rs. 98,528/- stated to have been allowed to the contractor afresh.
13. He stated that the Government of India was unable to agree with the State Government's suggestion that the claim preferred by the contractor should be met by the Sindri Fertilizer and Chemicals Limited. I here were certain enclosures to this letter and one of them was a letter dated 3-3-1954 sent on behalf of Sindri Fertilizers and Chemicals Ltd. to the Chief Engineer, Bihar Public Health Engineering Department, Sindri, in which the said concern indicated that there was no liability on the part of the company for the payment of any further compensation or ex-gratia payment to any contractor in respect of the settling tank work. The terms of agreement between the plaintiff and the Superintending Engineer acting on behalf of the Governor of Bihar were incorporated in a deed marked exhibit D and clause 25 of that deed provided that except where otherwise specified in this contract, the decision of the Superintending Engineer for the time being shall be final, conclusive and binding on all parties to the contract upon all questions relating to the mean of the specifications, drawings and instructions herein before mentioned as to the quality of workmanship or materials used on the work, or as to any other question claim, right, matter or thing, whatsoever, in any way arising out of, or relating to, the contract, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same, whether arising during the progress of the work or after the completion or the sooner determination thereof of the contracts.
14. It thus appears that according to the terms of terms deed, the decision of the Superintending Engineer with regard to the claims of the plaintiff was to be final and binding on the parties it appears from the evidence of P.W 3 that at the time of the contract, the Superintending Engineer was the head of the Public Health Engineering Department, but in 1951 the thier Engineer became the head of that department. It thus appears that the Chief Engineer in his capacity as the head of that department wrote the letter, exhibit 1(f) dated 30-7-1953, accepting the claim of the plaintiff to the tune of Rs. 98528/-. This decision, of the chief Engineer, according to the terms of the agreement, must Srind the defendant and the plaintiff rightly relied upon this letter in support of, the claim made in the plaint. I would, therefore, affirm the finding of the trial Court that there was the liability are the defendant to pay this amount to the plaintiff.
15. Learned Additional Government Pleader attempted to make out that the state of Bihar had only acted as an agent of the Union of India and the liability. If any, was of the Union of India in respect of the claim of the plaintiff and not that of the State of Bihar (defendant). It is difficult to accept this contention and, to begin with, the agreement (Ext. D) was with the Governor of Bihar and not with the Union of India. Even prior to this, the tenders were invited by the Government of Bihar and the correspondence prior to the agreement and subsequent to it were between the plaintiff and the various officers of the Government of Bihar, such as, exhibits 1, 1(a), 1(b) and some other letters. The learned Subordinate Judge has carefully considered this objection or the defendant and overruled it on reviewing the documentary evidence relevant on this point. Learned counsel was not able to point out anything for my taking a contrary view and I do not find any merit in this objection.
16. Next comes the question as to whether the suit of the plaintiff was barred by limitation and as to which article of the Indian Limitation Act was applicable, the learned Subordinate Judge took the view that the period of limitation started from the date on which the Sindri Fertilizers and Chemicals Ltd. refused to accept the recommendation of the Chief Engineer, Public Health Department, for payment of the excess amount to the plaintiff and thus the period of limitation ran from 3-3-1954. He accordingly held that the suit having been filed on 30-8-1956 the claim was within the prescribed period or limitation even if Article 55 of the Limitation Act applied to this suit as contended by the Government Pleader. His conclusion was that the suit was not barred by limitation. The learned Additional Government Pleader contended Shat the work commenced on 27-2-1947 and it was completed in 1950 according to the evidence of P.W 3, but the salt came to be filed on 30-8-1956 Which was beyond three years of the completion of the work. He further pointed out a passage in the judgment of the Subordinate Judge where he had observed that the counsel for the parties had agreed that the work was completed in 1948.
17. Learned Additional Government pleader could not point out any material in support of the observation that the work was completed in 1948. He, however, relied on the evidence of P.W 3 and submitted that the worn having been completed in 1950, the suit filed in August, 1956 was undoubtedly beyond the prescribed period or limitation according to the provisions of Article 56 and the suit should be dismissed on that score. Article 56 provides a period of three years from the time when the work is done in respect of a suit for the price of work done by the plaintiff for the defendant at his request where no time had been fixed for payment Learned Additional Government Pleader urged that the period of three years should be computed from 1950 when the work was completed and the provisions of this article were clearly applicable in respect of the present claim of the plaintiff. Learned counsel for the respondent refuted this contention and relied on the residuary Article 120 of the Limitation Act which provided a period of six years for institution of a suit of this kind. He contended that the right to sue accrued to the plaintiff only when the defendant refused to pay the plaintiffs claim and the suit was filed within six years of the refusal.
18. His alternative argument was that the suit was within three years of the admission of the plaintiff's claim by the Chief Engineer on 30-7-1953, vide exhibit 1(f), and in any view of the matter, the suit was not barred by time. So far as Article 120 of the Indian Limitation Act is concerned, this Article is a general one and it applies to suits to which no other Article is applicable. Learned Additional Government Pleader pressed that Article 56 was applicable, but this applies to cases where work is done by the plaintiff for the defendant at the latter's request, some specific work has to be done at the request of the other party. If a person brings a suit for recovery of a certain amount on account of the cost of printing certain papers, this Article would be applicable and reference may be made to the case of Ambica Dat Vyas v. Nityanand Singh, ILR 30 Cal 687. The expression “at his request” has some significance and unless there is evidence to Indicate that the work was done at the request of the defendant, the provisions of this Article would not be applicable. Learned counsel referred to a Full Bench decision of the Lahore High Court in the case of Mahomed Ghasita v. Siraj-ud-din, AIR 1922 Lah 198.
19. The plaintiffs there had claimed certain, sums of money for material supplied and work done and the claim was indivisible. In the plaint, there was no mention of the price of the materials as distinct from the price or the work. It was held that the provisions of neither Article 52 nor Article 56 were applicable to that case and, on the other hand, a suit of that kind came within the purview of Article 115. This decision is of no assistance to the defendant, Inasmuch as the claim in the present case is for a specific sum on account of the increase in the wages. I have come across a decision of this upon in the case of Ramlal Mistry v. Commrs. of Tekari municipality, AIR 1961 Pat 485. The plaintiff there was a professional contractor and he was given several contracts for doing a number of works for the defendant Municipality at different rates and for different amounts. In pursuance of those contracts, his dues amounted to 1335/2/- which was not paid to him and, therefore, he Instituted the suit for recovery of the same together with Interest etc. in the plaint, he gave a list of fie different Items of work with specific amount of labour charge for each item and the different materials supplied by him with specific cost for each of them.
20. The defendant Municipality contested the suit mainly on the ground that the claim of the plaintiff was barred by limitation. The trial Court overruled the plea of limitation and decreed the suit in part after disallowing the claim of the plaintiff for interest. On appeal by the defendant, the lower appellate Court dismissed the entire suit on the ground that it was barred by limitation. With respect to the item relating to the supply of materials, the Court of appeal below had applied Article 52 of the Limitation Act and with regard to the items relating to the works done by the plaintiff for the defendant, the provisions of Article 56 were applied, the plaintiff urged that the case was governed by the provisions of Article us which provided three years' period of limitation from the date of the breach of the contract and, in support of that contention, he relied on the decision of the Full Bench in AIR 1922 Lah 198, but this contention was negatived. It was held that Articles 52 and 56 specifically provided a period of limitation for a salt for the recovery of price of goods sold and delivered and for the price of work dons any the plaintiff for the defendant at his request.
21. It does not appear that in that case, before giving the contract tenders were called for, interim payments were to be made during the continuance of the work and final payments were to be made after adjustment of the interim payments. The facts of the present case are entirely different. Clause 8 of the agreement (Ex. D) provides that on measurement of the works done, for the convenience of the contractor, interim payments shall ordinarily be made monthly but final payments shall not be made until the whole of the works shall have been completed and a certificate of the completion thereof has been given. It was open to the Engineer to deduct a sum equal to give per cent of the said payments such sum or sums to be held in deposit as a further security for the due performance of the conditions of this contract. There was another stipulation that all such interim payments were to be regarded as payments by way of advance against the final payments only and not as payments for works actually done and completed. Those payments could not preclude the removal of bad, unsound and imperfect or unskillful work.
22. Another stipulation was that the final bill was to be submitted by the contractor within one month of the date fixed for completion of the work otherwise the Engineer's certificate of the measurements (due notice having been given before hand to the contractor of the date of such measurement) and of the total amount payable for the works accordingly were to be final and binding on all parties. According to these terms of the contract, interim payments were to be made to the contractor by way or advances and they were to be adjusted at the time of the final payment. The final bill was to be submitted within one month of the date fixed for the completion of the work and final payments could not be made until the Entire work was completed and a certificate of completion was given. This was the term in the original contract with regard to payments. A subsequent event happened later on. After the resolution dated 12-5-1947 of the Central Government with regard to the increase in the wages or the workers in the coal field, plaintiff approached the Superintending Engineer for allowing it additional sums for paying wages at higher rates to the labourers and the said officer accepted the said proposal. In other words the plaintiff alleged that Were was an oral contract with the Superintending Engineer who was acting on behalf of the Governor of Bihar and in support of this contention it relied on the letter dated 30-7-195.5, exhibit 1(f) sent by the Chief Engineer. I am thus of the view that in case of a contract like this, the provisions of Article 58 win I not be applicable.
23. I have to consider at this stage the effect of this oral contract, although it was not urged. This oral contract was sometime after the resolution dated 12-5-1947 out it is undoubtedly void inasmuch as it was not in writing. Under Section 175(3) of the Government of India Act a contract entered into by the Governor of a province must satisfy three conditions. It must be expressed to be made by the Governor; it must be executed; and the execution should be by such persons and in such manner as the Governor might direct or authorise. If a contract is not in the form required by section 175(3). it cannot be enforced and a private individual who had entered into a contract cannot sue either the State of Bihar or the Dominion of India for compensation for breach of such contract Reference may be made to State of Bihar v. Karam Chand Thapar and Brothers Ltd., AIR 1962 SC 110. and Bhikraj Jaipuria v. Union Of India , AIR 1962 SC 113. The plaintiff accordingly cannot claim compensation on account of a breach of this oral contract. This leads to another question as to whether the plaintiff can get any relief after this contract has been held to be void.
24. Section 70 of the Indian Contract Act provides that where a person lawfully does anything for another person, or delivers anything to him not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered. Applying the provisions of Section 70 to the present case, the plaintiff has to prove that (1) It did the work for the defendant (2) it did not intend to do it gratuitously, and (3) the defendant enjoyed the benefit of the work. There can be no dispute that the plaintiff has undertaken to complete the work in question and it completed it in usual course and this work was done for the defendant. The plaintiff while doing the work had an element of self Interest inasmuch as the defendant had agreed to pay the plaintiff additional sums on account of the increase in the labour rates. The work was not done voluntarily. Benefit as well was derived by the defendant on account of the work done by the plaintiff. I am thus of the opinion that the conditions for the applicability of section 70 have been fulfilled and the defendant is bound to compensate the plaintiff for the work done. This point as well is settled in view of the decision of the Supreme Court in State of West Bengal v. B.K Mondal, AIR 1962 SC 779. In that case, their Lordships observed as follows:
“In the present case there has been no dispute about the claim for compensation but normally a claim for compensation made under S. 70 may not mean the same thing as claim for damages for breach of contract if a contract was subsisting between the parties. Thus considered would, we think, not be reasonable to suggest that in recognising the claim for compensation under S. 70 we are either directly or indirectly nullifying the effect of S. 175(3) of the Act or treating as valid a contract which is invalid. The fields covered by the two provisions are separate and distinct; S. 175(3) deals with contracts and provides how they should be made. Section 70 deals with cases where there is no valid contract and provides for compensation to be paid in a case where the three requisite conditions prescribed by it are satisfied. We are, therefore, satisfied that there is no conflict between the two provisions.”
25. After these decisions, a question similar to the one which I am dealing with arose in Hindustan Construction Co. Muzaffarpur… v. State Of Bihar…., AIR 1962 Pat 336 (FB) and their Lordships answered the questions referred to the Full Bench in the following manner:
“(1) A contract with the Union Government or the State Government made without complying with the formalities of Section 175(3) of the Government of India Act, 1935 or Article 299(1) of the Constitution of India is a void contract and not merely unenforceable.
(2) Such a void contract cannot be ratified at a subsequent stage by the Government. Were is no question of estoppel or ratification with regard to a contract of this description.
(3) If he goods have been delivered or service have been rendered to the Government in pursuance of such a void contract, then an obligation is imposed upon testate Government under Section 10 of the Indian contract Act to make compensation to the person delivering the goods or rendering the services provided the conditions imposed under Section 70 of the Indian Contract Act are satisfied, as pointed out by the Supreme Court in Civil Appeal No. 286 of 1958, D/- 5-12-1961: (AIR 1962 SC 779).”
26. Later on this case, Hindustan Construction Co. Muzaffarpur… v. State Of Bihar…., (F.A No. 129 of 1954, Pat), was placed before Division Bench and it was held that the plaintiff in that case could get compensation in view of the provisions of Section 70 of the Indian Contract Act. In that case were was no written contract except for certain correspondence between the plaintiff on the one hand and the executive Engineer or the Superintending Engineer of the Public Works Department on the other in respect of some building projects. It was held in that case that the oral contracts were completely void and not enforceable at all, but the plaintiff could claim compensation if an obligation was imposed according to the provisions of Section 70 of the Indian Contract Act. That first appeal No. 129 of 1954 (Hindustan Construction Co. Muzaffarpur… v. State Of Bihar….) was decided in 23-1-1963. I am accordingly of the view that it is open to the plaintiff to claim compensation from the defendant in accordance with the provisions of Section 70 of the Indian Contract Act.
27. Learned counsel for the State relying on the full Bench decision in AIR 1922 Lah 198 urged that if the provisions of Article 56 were not applicable, then this case was governed by the provisions of Article 115 of the Limitation Act. This contention cannot be accepted, inasmuch as Article 115 provides a period of limitation for a suit for compensation for the breach of any contract, express or implied, not in writing registered and not otherwise specially provided for. The contract in the present case being void, the plaintiff cannot sue for compensation for the breach of a void contract. The cause of action can no longer be breach of any contract. The instant case is thus not governed by the provisions of Article 115.
28. Article 120 provides a period of six years for institution of a suit for which no period of limitation has been provided elsewhere in the first schedule of the Indian Limitation Act, and this period has to be reckoned from the time the right to sue accrues. The right to sue means a right to seek relief, that is, to obtain ??? by means of legal process. There must be first an accrual of a right asserted in a suit and then its infringement, it these facts are proved, then a person gets a right to sue. The question as to when a right to sue accrues depends upon the facts and circumstances of each case. I am of the view that on the facts and circumstances or this case, the provisions of Article 120 are attracted and it has now to be seen as to when the plaintiffs right I to sue accrued and whether the suit was filed within six years of the accrual of that right. The work, according to the evidence of P.W 3 was completed in 1950 and the defendant got benefit of the work done by the plaintiff.
29. The first letter relevant in this connection is exhabit 1(b) dated 26-12-1952 sent by the plaintiff to the Construction Engineer reminding him that he and the Superintending Engineer had given an assurance that its claim for the increment in the rates would be favourably considered after making certain enquiries. The plaintiff by this letter requested for an early settlement of the claim. On 15-1-1957, the plaintiff sent another letter, exhibit 1(c) to the Construction Engineer for an early decision of the claim as much as another contractor Telu Ram Jain had been already allowed additional sums on account of the increase in labour rates. The Chief Engineer, public Health Engineering Department, then made an enquiry on 3-3-1953 by a letter Exhibit 1(k), from the Chief Engineer central Public Works Department, as to whether Telu Ram lain had been paid additional sums. On 1-7-1953 the plaintiff gave details of the claim to the tune of Rs. 2032/4/14/- vide exhibit 1(d) and on 15-7-1953 the Executive Engineer recommended that the plaintiff should 1?e paid Rs. 113824/- vide exhibit 1(1).
30. Lastly the Chief Engineer took the view on 30-7-1953 that the plaintiff should be paid Rs. 98528/- and this is contained in the letter, exhibit 1(f). The position thus is that the plaintiff completed the work in 1950, asserted in its claim on 28-12-1952 and went on sending several reminders for an expeditious disposal of the claim, on 3-3-1954, the Controller of Accounts Sindri Fertilizers and Chemicals Ltd. wrote to the Chief Engineer that there was no liability on the part of the company for the payment of any further compensation or ex-gratia payment to the plaintiff in respect of settling tank work. The controller expressed inability of the company to entertain the second revised estimate which provided for ex-gratia payment to the Contractor. This letter of the Controller of accounts in an annexure to the letter, Exhibit A(2) dated 11-7-1955 sent by the Under Secretary to the Government of India to the Secretary to the Government of Bihar, Public Health Engineering Department, Patna. The plaintiff's right to get the additional sum was denied on 3-3-1954.
31. In other words, there was an infringement of the plaintiff's right on 3-3-1954 and the plaintiff filed the present suit on 30-8-1956. In this view of the matter the plaintiff's suit is not barred by time and I would affirm the finding of the learned Subordinate Judge in this respect but not on the ground that the provisions of Article 56 are applicable.
32. The result is that the appeal fails and is dismissed.
33. The plaintiff has filed a cross objection, with regard to the claim for interest at the rate of six per cent per annum from August 1953 to June 1956, and it amounted to Rs. 17,241/14/- The subordinate Judge pointed out that there was no agreement or contract between the parties with regard to interest and in this view of the matter he disallowed it. He did not even grant interest pendente lite and future. Learned Counsel for the plaintiff-cross objector frankly conceded that there was no agreement for the payment of the interest but he submitted that according to the customs and usage interest should be allowed. No such custom or usage was mentioned in the plaint and the evidence on that point is absolutely lacking. Learned counsel referred to a letter, exhibit 1(a) dated 14-7-1948 sent by the plaintiff to the Superintending Engineer. It refers to various claims and the plaintiff had claimed interest with regard to claim No. 3. It is after all only an assertion of a claim and not an acceptance by the authorities.
34. On 27-12-1951, the Chief Engineer wrote to the General Manager, fertilizer Project, Sindri, forwarding a revised estimate in respect of a certain sum for approval and transmission to the Government of India. In this letter, exhibit A(7), he mentioned that the claim of the character included a certain amount of interest as well. The evidence about payment of the interest is not forthcoming. The position, thus is that the plaintiff neither pleaded about any custom or usage with regard to the claim for interest nor adduced any evidence in that respect Accordingly, in absence of any agreement, we plaintiff cannot be entitled to interest for the period prior to the filing of the suit. The claim, however, for pendente lite and future interest stands on a different footing and find that the plaintiff had made a prayer in the plaint for such interest on the decretal amount. The subordinate Judge has not at all dealt with the question as to whether the plaintiff was entitled to pendente lite and future interest. The claim of the plaintiff having teen allowed, there is no reason for disallowing interest from the date of the suit and till the date of recovery. The plaintiff is thus allowed pendente lite and future interest at the rate of 5 per cent per annum on a sum of Rs. 98528 and the cross objection is allowed to this extent only. The net result is that the appeal is dismissed, the cross objection is allowed in part and the judgment and decree of the trial court are modified. The plaintiffs suit is decreed in part for a sum of Rs. 98528 with interest at the rate of 6 per cent per annum pendente life and future till recovery of the said amount and the plaintiff will be entitled to proportionate costs throughout. The defendant is directed to pay the decretal sum to the plaintiff within a period of three months from today.
Mahapatra, J.:— I agree.
KG/S.G/G.D
35. Appeal dismissed.