LexSTATE OF UTTAR PRADESH & ANR. versus MURARI LAL & BROTHERS LTD.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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STATE OF UTTAR PRADESH &"ANR.
v.
MURARijLAL & BROTHERS LTD.
August 3, 1971
[K. s. HEGDE AND A. N. GROVER, JJ.]
Constitution of India, Art. 299(1)-Contract Act, 1872. s. 230(3)-
Purported contract between Government and private party not complying
withrequirements of Art. 299(1)-Whether enforceable-Liability of
agent of Government.
The respondent company had a cold storage. It filed a suit
against the Government of Uttar Pradesh and three of its officials claim-
ing rent or damages on the allegation that under an agreement nego-
tiated by Defendant No. 3 under instructions from Defendants Nos. 2
and 4 on behalf of the State Government {defendant No. 1) space had
been reserved in its cold storage by the company for the storage of
Government potatoes but no potatoes had been sent for storage. o,.
behalf of the State Government it was pleaded that no contract was
entered into in accordance with Art. 299(1) of the Constitution.
The trial court upheld the objection of the State and dismissed the
suit against it, but it held the other defendants liable for the storage
charges. The High Court on appeal by the defendants set aside the
decree against defendants Nos. 2 and 4 but maintained it against
defendant No. 3. According to the High Court the entire transaction
had been entered into by the defendant No. 3 on behalf of the Govern-·
ment and since the State Government was not liable by virtue of Art.
299 of the Constitution the said defendant would be liable under s.
230(3) of the Contract Act. In appeal to this Court by certificate,
HELD : Except in Chatturbhuj's case which lent some support
to the High Court's view, this Court has taken the view that the provi-
sions of Art. 299(1) are mandatory and contain a prohibition against
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a contract being entered into otherwise than in the manner prescribed
by the aforesaid provisions. The obsevations in Chaturbhuj's case
have been regarded in subsequent decisions as either not laying down
the law correctly or as being confined to the facts of that case. The
consensus of opinion is that a contract entered into without complying
with the conditions laid down in Art. 299(1) is void. If there is no
contract in the eye of the law it is difficult to see how s. 230(3) of the
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Contract Act would become applicable. [5 DJ
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The appeal must accordingly be allowed.
Chatturbhuj Vithaldas Jasani v.
Moreshwar Pamsliram & Ors.
[1954] S.C.R. 817, not followed.
State of West Benga/v. M/s. B. K. Monda/ & Sons. [1962] Supp.
I S.C.R. 876, and Mulamchand '" State of Madhya Pradesh, [1968] 3
S.C.R. 214, applied.
[For the reasons stated in the judgment the court did not give any
final opinion on the question of applicability of s. 235 of the Contract
SUPREME COURT REPORTS
[1972] l S.C.R.
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Ac.t to cases when the contract suffers from the infirmity that the re-
quirements of Art. 299(1) of the Constitution have not been compli-
ed with]
CIVIL APPELLATE JURISDICTION: Civil Apeal No. 15 of
1968.
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Appeal from the judgment -and decree dated August
11, 1964 of the Allahabad High Court in first Appeal
No. 11 of 1957.
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C. B. Agrawala, O. P. Rana and R. Bana, for the
appellants.
S. P. Sinha, 0. P. Gupta and M. I. Khowaja, for the
respondent
The Judgment of the Court was delivered by.
Grover, J.-This is an appeal by certificate from
the judgment of the Allahabad High Court dacreeing
the suit filed by the respondent company for recovery
of a sum of Rs. 21,000/- on account of rent or damages
in respect of storage charges for 4,000 Maunds of po-
tatoes for which space had been reserved in the cold
storage by the company
The plaintiff respondent brought a suit against th@
-State of Uttar Pradesh and impleaded three other
defendants who were, at the material time. in the
service of the State. Defendant No. 3 was a Horticul-
turist in the Department of Agriculture. He negotiated
with the plaintiff for storing Government potatoes in a
cold storage which belonged to the plaintiff. It was
.agreed that the Government potatoes would be sent for
storage and the plaintiff would be entitled to charge at a
certain rate per maund. It was understood that 4,000
maunds of potatoes would be sent for storage. How-
ever, no potatoes were sent although the plaintiff had
reserved the requisite space in the storage which remained
unoccupied
during
the
season.
It appears that
defendant No. 3 A. P. Gupta was acting on behalExcerpt shown. Read the full judgment & AI analysis in Lexace.