The Judgment of the Court was as follows:
1. This Rule has been obtained against an order of the Judge of the Small Causes Court, Sealdah, dated the 30th January, 1940, decreeing a claim of the Municipal Commissioners of the Tollygunj Municipality for Rs. 840-6.
2. The Petitioner with the assistance of Opposite Party No. 2 acquired some land within the jurisdiction of the Tollygunj Municipality for the purpose of developing it into a residential area. The plot so acquired lies to the north of a large area acquired by the Corporation of Calcutta for the Christian Burial Board, and between these two plots lay a narrow road. The Petitioner desired that this road should be converted into a suitable wide road for access to the proposed residences, and also that an extensive tract to the east should be drained. For this purpose he approached the Chairman of the Municipality. It was arranged with the Corporation of Calcutta and the Christian Burial Board that the latter would transfer some land, necessary for widening the road to twenty feet, on condition that subject to the right of user by the public, the proprietary right should remain in the Corporation. The Petitioner paid Rs. 1,000 to the Board and the land was made over. On the 25th May, 1935, the Commissioners of the Tollygunj Municipality resolved to proceed with the matter under sec. 221 of the Bengal Municipal Act, (which authorises Commissioners to widen, open, enlarge or otherwise improve any public street), according to the terms offered by the Calcutta Corporation and the Board, and it was noted that the Petitioner had undertaken to arrange for drainage towards the west, and to pay all costs regarding the construction of the road in question. The Calcutta Corporation had stipulated that the work should be done by the Tollygunj Municipality. So far the parties are in substantial agreement, but it is the case of the Petitioner that he all along stipulated that the work was to be carried out by himself. He contends that to meet technical objections it was agreed that he would deposit the necessary amount with the Tollygunj Municipality, and draw from that for payment in carrying out the work. The Petitioner was asked to pay a sum of Rs. 3,300, the estimated cost, in a letter dated the 17th January, 1936. He replied on the 29th February submitting an estimate prepared by one Pulin Behari Ghosh for Rs. 2,440-6. Later the Petitioner was asked to meet the cost of acquisition of land for the purpose of constructing a drain, amounting in all to Rs. 400, and to deposit a sum of Rs. 2,000 towards the cost of the road. On the 19th March, 1936, he sent his son with Pulin Behari Ghosh to attend a meeting of the Commissioners, authorising deposit of Rs. 2,000 by his son on the understanding that the Petitioner would be in turn authorised to complete the construction of the road. The Commissioners accepted the amount of Rs. 2,000, stating that Rs. 400 out of it would ear-marked for the drain and the balance would be utilised for construction of the road, and resolved that the work be taken up at once by the contractor Pulin Behari Ghosh “as proposed by the party” at the estimated amount of Rs. 2,440-6.
3. The Petitioner denies that he agreed to any such terms, and also alleges that there was a flaw in the proceedings in that the meeting of the 19th March at which this resolution was passed was an adjourned meeting, and this item was not on the agenda. The work has been carried out, and disputes have now arisen between the parties. The suit is for the balance of the total estimate of Rs. 2,440-6 after deducting the amount of Rs. 1,600, the balance left out of the Petitioner's deposit of Rs. 2,000 when the amount of Rs. 400 is set aside for the drain. No proper contract was drawn up in writing signed and sealed as required under sec. 103 of the Bengal Municipal Act.
4. Three points have been urged before me for the Petitioner; (1) that there was no valid agreement between the parties which would have been enforceable if they had both been ordinary individuals, (2) that as admittedly there is no proper contract binding on the Commissioners in view of the provisions of sec. 103 (3) of the Bengal Municipal Act, (i) the Petitioner is also not bound and (ii) the Municipality can recover nothing; (3) as the meeting at which the contract was sanctioned by the Commissioners was irregular in being an adjourned meeting, and the matter of the contract not being on the agenda of the meeting, the contract cannot be enforced against the Petitioner.
5. The first point is really one of fact; the learned Judge has found on this point in favour of the Commissioners. Such argument as has been adduced to me on the subject does not lead me to think that I should even take a different view if the facts were open to consideration by me, and certainly no error of law has been indicated as being committed by the learned Judge in arriving at his decision. The finding of the learned Judge on this point cannot be assailed.
6. The important point in the case is the second, and on the view I take, it is not strictly necessary to deal with the third, nor indeed was it very strongly pressed. It may first be briefly disposed of. The Model Rules issued by the Provincial Government for the purposes of sec. 91 of the Bengal Municipal Act have been adopted by the Municipality. Rule 31 thereof requires that no business shall be transacted at an adjourned meeting save that which was left unfinished at the original meeting. The meeting of the 19th March, 1936, at which the proposal for the construction of the road in question here was sanctioned, was admittedly an adjourned meeting, and the subject had not been on the agenda of the previous meeting. The minutes of the meeting were however duly signed and confirmed. Under the provisions therefore of sec. 92 (2) of the Act the meeting is to be deemed to be free from all defects and irregularity. No objection can be raised to the contract under consideration on the ground that it was not sanctioned at a meeting.
7. The second point involves two questions: (i) whether the Petitioner is bound by the agreement although the requirements of sec. 103 of the Bengal Municipal Act have not been complied with and (ii) whether even if he is not bound, the Municipality can recover anything from him under any other provision of he law.
8. Similar questions were considered by this Court in Mohamed Ebrahim Molla v. The Commissioners for the Port of Chittagong(1). The Port Commissioners of Chittagong had let out one of their tugs for use outside the Port limits for towing a vessel of the Defendant-Appellant, and the vessel had stranded. The Port Commissioners sued on an alleged contract. Sec. 29 of the Chittagong Port Act, 1914, so far as is material for consideration here, is in similar terms to sec, 103 of the Bengal Municipal Act, and it was held that “having regard to the express provisions of the statute, we think that non-compliance with the provisions of sec. 29 renders the agreement not binding on the Commissioners.” The relevant cases were discussed at length, in particular the leading case on the subject which deals with a similar provision in sec. 174 of the Public Health Act, 1875, namely, Young v. Leamington Corporation(2) and it is not necessary for me to say more than that the same reasoning must apply in the present case. The Court had further to consider the question whether in view of the wording of sec. 29 of the Chittagong Port Act to the effect that the contract was not to be binding on the Commissioners, there was any reason why it should not nevertheless be binding on the Defendant Appellant, a private individual. Relying on the case of Raman Chetti v. The Municipal Council of Kumbakonam(3), (a case of executed contract), and Ahmedabad Municipality v. Sulemnji Ismalji(4), (a case of an executory contract), this Court held that the Defendant also was not bound by the contract.
9. Mr. Hira Lal Chakravarti who appears for the Municipality places reliance on the decision of Sir Lawrence Jenkins and Jacob, J., in Abaji Sitaram v. Trimbak Municipality(5) which was a case of a grantee of the right to collect certain tolls from pilgrims who was sued on the contract by the Municipality. In the course of the appeal it was discovered that the contract in question was not under seal and sec. 23 of the Contract Act was evoked as a bar to the claim. It was held on the basis of the law in England that “though a contract by a Corporation must ordinarily be under seal, still where there is that which is known as an executed consideration, an action will lie though this formality has not been observed,” and the full claim as on the contract was allowed. It is to be noted that there was no discussion in the case of the distinction between instances where the requirement if a seal is statutory [cf. Young v. Leamington Corporation], and instances where the requirement is under the common law [cf. Lawford v. Billericay R.D.C(6)] and the statement of the law has been held by the Allahabad Court in Radha Krishna Das v. The Municipal Board of. Benares(7), relying on the decision of the House of Lords in Young's case, to be too wide. Both these cases were considered by this Court in Mohamed Ebrahim Molla v. The Port Commissioners of Chittagong and the view of the Bombay Court was not accepted. I hold therefore that the contract here is not binding on the Petitioner.
10. There remains only the question whether in the absence of the contract, the Municipality is entitled to recover anything from the Defendant. In this respect the case of Mohamed Ebrahim Molla v. The Port Commissioners of Chittagong which is otherwise relied on by the Petitioner, is against him, for it was held that the Port Commissioners were entitled to quantum meruit. Mr. Phanibhusan Chakravartti who appears for the Petitioner urges that this was allowed principally because the learned Counsel for the Appellant did not choose to contest a claim so based, he merely put forward the contention that the Chittagong Court had no jurisdiction to entertain such a claim. In the report Mr. Pugh is quoted as having stated in his opening argument that the Defendant, though not bound by the contract, was bound to pay some compensation for the use of the tug on proof of what is payable. In his reply, on Mr. Mitter (as he then was) urging that sec. 65 of the Contract Act entitled his client to damages, Mr. Pugh contended that if only quantum meruit was wanted, the Plaintiff would have to apply for that at Moulmein, and also remarked that Pollock and Mulla in their commentary “say that the Corporation is entitled to nothing.” The case has been discussed at some length in the later 6th Edition of Pollock and Mulla's “Indian Contract and Specific Relief Acts.” The learned authors adhere to their previously expressed view mentioned in argument by Mr. Pugh and submit that both Counsel and Court were in error in thinking that the Plaintiffs were entitled to a quantum meruit, as “no payment upon a quantum meruit can arise where an Act is imperative.” The judgment does not state under what provision of law quantum meruit was granted, but presumably sec. 65 of the Contract Act was held to apply. Whatever may be said in the matter on the basis of the English authorities it seems difficult to hold that sec. 65 cannot apply merely because of an imperative provision in an Act which renders an agreement unenforceable and so void. Sec. 2 (g) of the Contract Act may be noted in this connection. I am in any event bound by the decision of the Division Bench of this Court in the matter. I may refer however to the case of Radha Krishna v. The Municipal Board of Benares which is also discussed in Pollock and Mulla (6th Edn. at page 376 et seq.). There the Plaintiff sued the Municipality in respect of ballast supplied. The Municipality had paid for some of the supply but there was a dispute as to some of the balance; the Municipality deposited in Court the amount they considered proper in payment of the actual amount of the balance of ballast used by them, but refused to pay for some ballast dumped on the road, but rejected by them. The suit was in respect of the price of the ballast actually used, and for the price of the remainder rejected. The Court held as already noted above, dissenting from Abaji Sitaram Modak v. The Trimbak Municipality, that apart from secs. 65, 70 and 72 of the Indian Contract Act, it appears to us that the agreement entered into between the Appellants and the Respondent Municipality not having been committed to writing and signed as required by the Municipalities Act, cannot form the basis of any suit against the Municipality, notwithstanding that ballast was supplied in pursuance of it.” It also held that secs. 65, 70 and 72 were of no assistance. It rejected sec. 65 on the ground that the agreement had not been “discovered to be void.” Without deciding whether sec. 70 applied, it held that the Appellants could not be said lawfully to have delivered to the Municipality the ballast which the Board had not used, while the Board had paid for what had been used. With respect, I am unable to appreciate the reason for rejecting the applicability of sec. 65, but in any case the reason given for holding that the Plaintiff could recover nothing under sec. 70 would equally apply to the same effect if sec. 65 governed the case. On the findings of fact there was no basis for a quantum meruit; the matter would have been otherwise, had the Municipality relied on the finding that the agreement was void to repudiate payment for the brilast actually used. The question whether the Municipality was liable to pay anything for that was not before the Court. But this was exactly the nature of the question considered in Mohamed Ebrahim Molla's case by this Court. I hold therefore that the present claim is to be governed by the provisions of sec. 65 of the Contract Act and the Petitioner is liable to make compensation for any advantage he has received under the agreement.
11. We have to consider then the nature of the liability under sec. 65 of the Contract Act. The Petitioner is not to pay for the advantage received, he is to make compensation to the Municipality, and I take that to mean that they are not to suffer loss if he has had advantage. In my opinion in the special circumstances of this case the Municipality has suffered no loss requiring compensation. Their only loss is the loss of the benefit of the contract, and sec. 65 cannot mean that they are entitled to this. It is necessary to examine what was the nature of this contract. The Municipality was not selling a road to the Petitioner. Only the Municipality had the power to enlarge this road, and the duty to maintain it. They might well have done so without any approach by the Petitioner. All the local public likely to use it were to get advantage from the reconstruction as also the Christian Burial Board and those likely to use or visit the cemetery. The Petitioner as a local land-speculator was merely one member of the public who would incidentally be likely to get special advantage. On account of his position the Petitioner was willing to place an amount in the Municipal fund to expedite the construction of the road. I think the case would have been no different if the Municipality had been about to make the road, and the Petitioner out of sentiment had offered a sum to have it named after his father. It happens that the amount he agreed to pay was the same as the actual estimate for the cost of construction, it might have been less, it might have been more. The cost of construction has no relation to the monetary value of the advantage to him; it has equally no direct relation to any loss suffered by the Municipality by its construction. We must ask what that loss is. The road is there for the benefit of the public. The agreement by the Petitioner to pay the amount of the estimate influenced no doubt the decision of the Commissioners as to how they would distribute their annual budget allotment for roads, the payment was made for that purpose, but the fact that it was influenced in a particular way has caused the Municipality no loss, The Municipality can not suggest that this was a useless road that ought never to have been constructed. The only loss they have suffered is what is due to the fact that they cannot enforce the agreement of the Petitioner, to pay. I hold therefore that though sec. 65 of the Contract Act applies in terms, in the circumstances of the case the Municipality can recover nothing under that section from the Petitioner.
12. The rule is accordingly made absolute, and the decree of the lower Court is set aside. Each side will bear its own costs in this Rule.
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