Ganesh Prashad Sah, Chairman, Motihari Municipality vs Shaikh Jawad Hussain

Wort, J.—The District Judge in this case has dismissed the plaintiff''s action, the plaintiff being the representative of the Motihari Municipality, for the sum of money to which the Municipality claimed to be entitled as against the defendant in the following circumstances: The defendant had taken what has been described by the Judges in the Courts below as a lease of a market for the years 1927 and 1928. It was proposed to grant a fresh lease for the purposes of which resolution of the Municipality was passed. It is stated in the evidence that the defendant was present on that occasion and agreed to pay a sum of Rs. 40,001 for a further period of one year. It is a fact however that no contract or document under seal in compliance with Section 64, Bihar and Orissa Municipal Act was made by the Municipality, and the defendant therefore went into possession of the market under the resolution to which I have referred. After a period of seven months he offered to surrender his rights which surrender was accepted. I use the expression "lease" as an expression used by the learned Judges in the Courts below, but in my judgment it is quite clear that even if the grant had been to the defendant under seal it would not have been a lease; at the most it could be said that he had a license with respect to the land on which the market was held, and the dues payable by the defendant to the Municipality were the dues in respect of that license. Had it been the case of a lease, the question which arises in this appeal, that is to say, whether the action is barred by limitation � and that is the only question�would have to be determined by considering whether the dues owing by the defendant were in the nature of rent or were in the nature of damages for use and occupation.

Now, the learned Judge in the Court below, as I have stated, has dismissed the action as being barred by limitation applying Article 115, Lim. Act to the case. It appears to me that the appellant is on the horns of a dilemma. If they are in a position of not being able to enforce their rights by reason of the fact that the seal was not attached to the contract or document which either was executed or was to be executed, and that without such seal he is not entitled to sue, then quite clearly the action would fail on that ground.

That view of the matter has been taken by Sir Lawrence in Ahmedabad Municipality v. Sulemanji Ismalji (1903) 27 Bom. 618. The contention of the appellant here is that the obligation to pay was not an obligation arising under the contract within the meaning of Article 115, Lim. Act. It is admitted and it is clear that the right of the plaintiff against the defendant is not one arising out of tort. Section 73, Contract Act was referred in the course of the argument advanced on behalf of the appellant. Clause 3 of that section provides this:

When an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge is entitled to receive the same compensation from the party in default as if such person had contracted to discharge it and had broken his contract.

Here, for the reasons I have stated, there was no contract binding within the meaning of the provisions of the Municipal Act, and the question therefore arises as to how does the obligation of the defendant in this action arise. Again the learned advocate for the appellant is bound to admit that it is an implied obligation by the defendant to pay for the seven months during which he was in possession. That seems to me to come quite clearly within Article 115, Lim. Act which provides:

The compensation for the breach of any contract, express or implied, not in writing registered and not herein specially provided for.

Their Lordships of the Judicial Commit, tee of the Privy Council in Tricomdas Coonerj Bhoja v. Gopinath Jiu Thakur AIR 1916 P.C. 182 have held that Article 116 applies to contracts registered and impliedly, if not expressly, have decided that the term "compensation" within the Article is used in the widest possible sense in India. Apart from the assistance of that authority, speaking for myself, I should have been inclined to hold, that the obligation of the kind in question in this case was not an obligation to pay the compensation from the point of view of the Common law, but a definite obligation to pay a sum certain under an implied contract. But it is too late in the day to take that view of the matter haying regard to the case to which I have referred and also a later case--the case in AIR 1933 143 (Privy Council) in which their Lordships of the Judicial Committee of the Privy Council have followed the earlier case to which I have also referred.

Again there is the authority of this Court in Chairman and Commissioner of the Chaibassa Municipality v. Gobind Sao AIR 1937 Pat. 360 in which my learned brother Fazl Ali has held that Article 115, Lim. Act applies to a case similar to the present with only one exception to which I shall refer presently and not Article 120.

The difference between the case reported in Chaibassa Municipality v. Gobind Sao A.I.R.1937 Pat. 360 and the present one is that it would appear that the contract was under seal. But as I have pointed out in the earlier part of my observation, the appellant Municipality is on the horns of a dilemma.

If the decision to which I have just referred does not apply by reason of the fact that the contract is not under seal then I should have imagined the only conclusion to be arrived at would be that the Municipality was not entitled to sue at all. If on the other hand they are entitled to sue they are entitled to sue by reason of the implied obligation which is expressly provided by Article 115, Lim. Act. In those ''circumstances it seems to me that the decision of the learned Judge in the Court below is correct and the appeal fails and must be dismissed with costs.

Yarma, J.

I agree.