R.B. Mundul and Co. vs Mahabir Ribs Manufacturing Co.

Ajay K. Basu, J.—This is an appeal from the judgment and decree by A. N. Ray J. on July 6, 1965.

The Plaintiff Mahabir Ribs filed the suit being Suit No. 179-1 of 1962 against two Defendants, R. B. Mundul & Co. and Century Engineering Works, for the recovery of Rs. 33,000, interest and costs etc. The suit was actually filed on November 13, 1962, when an application for injunction was also made.

The suit was heard by A. N. Ray J. who decreed the suit stating inter alia:

The result is that the Plaintiff is entitled to a decree for Rs. 33,000. This decree is against the Defendant No. 1, i.e. R. B. Mundul 8c Co....

From that judgment and decree the Defendant No. 1 R. B. Mundul & Co. has come before us on appeal. Century has not appeared before us here though as the Defendant No. 2 they appeared before the trial Court.

5.. Mr. A. N. Bose,. counsel for the Appellant, has urged several points in support of his case. According to him, the whole basis of the Plaintiff''s claim against his client has been pleaded in para. 3 of the plaint. The agreement as pleaded in para. 3, says Mr. Bose, is intrinsically absurd and should not be believed. If the agreement pleaded by the Plaintiff or any part of it has not been proved, the cause of action failed and the suit should have been dismissed.

Apart from this point Mr. Bose also urges that the suit as pleaded in the plaint does not disclose any cause of action and the suit is premature under Order 7, Rule 1(e) of the Code of Civil Procedure. The cause of action must be antecedent or complete before the suit can be filed, and in support of his contention Mr. Bose cited several cases.

The Plaintiff filed the suit against the Defendants and based his claim on an oral agreement as pleaded in para. 3 of the plaint which says:

In May 1962 the Defendant No. 1 by its partner and/or proprietor one Moni Mohan Mondal represented to the Plaintiff that the Defendant No. 1 was importing 25 metric tons spring steel wires shipped per ''S. S. Nachison Maru'' and that the Defendant No. 1 required temporary financial accommodation from the Plaintiff to enable it to clear the shipping documents. The Plaintiff relied on the said representation and believed the same to be true and thereupon it was agreed by and between the Plaintiff and the Defendant No. 1, inter alia, as follows:

(a) That the Plaintiff would grant temporary financial accommodation to the Defendant No. 1 to the extent of Rs. 30,000 to enable it to clear the shipping documents.

(b) The Defendant No. 1 would repay to the Plaintiff the sum that would be advanced as and by way of temporary accommodation with commission at 10 per cent on clearance of the said goods from the Port authorities.

(c) That the said goods shall stand charged for payment of the sums that would be advanced by the Plaintiff to the Defendant No. 1 with commission thereon.

In pursuance of the said agreement the Plaintiff on the 29th May, 1962, advanced to the Defendant No. 1 at its office at Calcutta within the said jurisdiction as and by way of temporary accommodation a sum of Rs. 30,000 in cash to enable the Defendant No. 1 to clear the shipping documents.

The defence, inter alia, of R. B. Mundul was that true on May 29, 1962, they received Rs. 30,000, but that was paid on account of the Defendant No. 2, Century Engineering Works, on whose behalf the Appellant was importing the said steel wires. In para. 7 of the written statement the Defendant No. 1 R. B. Mundul & Co. stated:

This Defendant denies the allegations contained in paragraph 5 of the plaint. Assuming but not admitting that the said sum of Rs. 30,000 paid to the credit of the Defendant No. 2 was actually paid by or came out of the funds of the Plaintiff, the Plaintiff''s claim is against the Defendant No. 2 and not this Defendant." Alternatively, if for any reason this Defendant is ever held liable to pay the sum of Rs. 30,000, this Defendant is then entitled to be reimbursed from the Defendant No. 2 for the said amount and claims such reimbursement and/or reserves the right to take appropriate proceedings against the Defendant No. 1.

The following facts emerged on evidence:

(a) The Plaintiff was at all material times an established manufacturer of umbrella ribs for which spring steel wires are essential ingredients and sometimes the Plaintiff used to import such steel.,

(b) The Defendant No. 1, R. B. Mundul & Co., was at all material time an established importer and clearing agent and, as such, acted as importing and clearing agent of the Plaintiff for import of umbrella parts and other accessories on several occasions prior to the incident in suit though the amount involved were not as high as they were in the suit. The Defendant No. 1 was not a manufacturer of umbrellas or any part thereof.

(c) Century Engineering Works of which Sri Nihar Sen was the proprietor was endeavouring to establish a factory for manufacture of umbrella at Tokabari in Assam and, as such, was able to procure in anticipation the actual user''s import licence for the said spring steel wires for manufacturing umbrella ribs.

(d) The Defendant No. 1, R. B. Mundul & Co., of which Moni Mohan Mondal was the active partner was only importing the said spring steel wires and did everything necessary for such import licence on. behalf of the Defendant No. 2 Century by virtue of the letter of authority of the Government of India authorising R. B. Mundul & Co. to import against the import licence of Century Engineering Works.

(e) R. B. Mundul & Co. also executed a letter of guarantee to the Iron and Steel Controller that goods for importation should not be disposed of otherwise.

Apart from the merits the Appellant took certain preliminary points as stated earlier.

According to Mr. Bose, the basis of the Plaintiff''s claim or the cause of action of the Plaintiff as pleaded will commence on and from the date of clearance of the said goods from the Port authorities because that is the date when as alleged the amount will be payable. But, in this particular case admittedly the suit was filed before the entire goods were cleared because on November 13, 1962, when the suit was filed the Plaintiff moved an application for injunction restraining the Defendant No. 1 from clearing the said balance of goods. Therefore, as stated above, the suit was premature and the cause of action was not complete when the suit was filed and the cause of action must, be antecedent to the date of filing of the suit.

The Order 7, Rule 1(e) of the CPC states:

The plaint shall contain the following particulars....

(e) the facts constituting the cause of action and when it arose.

But, in this case admittedly the cause of action as pleaded in the plaint aid not arise when the suit was filed as the entire goods were not cleared by then.

Practically the leading Case on the point of our High Court was decided by Sir. Lawrence Jenkins C.J. in the case of Madras Steam Navigation Co. Ltd. v. Shalimar Works Ltd. I.L. R. 42 Cal; 85 which says that:

It is imperative under Order VII, Rule 1 (e), that the plaint should contain, in addition to other particulars, the facts constituting the cause of action and when it arose.

That case was followed by Lort Williams J. in the case of Ramprosad Chimanlal v. Hazarimull Lalchand ILR 58 Cat. 418. In that case the plaint was rejected on the ground that in ''the plaint particulars were not given of the facts constituting the cause of action and when it arose.

Similarly, in the case of Kalyani Dasi v. Ganesh Chandra Sreemani ILR 59 Cal. 448 Buckland J. followed the two cases cited above.

In the case of Mahant Gobind Ramanuj Das Vs. Rani Debendrabala Dasi, a Division Bench of the Patna High Court decided that:

It is well-settled that a cause of action must be antecedent to the institution of the suit and cannot arise from the pleadings themselves. I follow that the landlord''s consent not having been given before the institution of the suit there was at the time of the institution of the suit no cause of action and that the Plaintiff''s suit must be dismissed.

In the case of Dominion of India Vs. R.C.K.C. Nath and Co., the same principle was followed, viz. that cause of action must be complete before the suit can be filed.

In an old English case of Webb v. Fairmanner (1838) 3 M. & W. 473 Baron Parke said in the judgment that the rule appears to be that "the time calculated to be exclusive of the date on which the contract was made" and thereafter he says:

If the credit had been for one day, it is impossible to say that the Defendant would not have the whole of the next day in which to make payments. If so, the same must be true of any number of days, consequently he had the whole of the 5th December for that purpose.

Therefore, on the analogy of Baron Parke, even if the goods were cleared on November 13, 1962, the Plaintiff cannot file the suit before November 14, 1962.

Apart from this preliminary point Mr. Bose for the Appellant argued that the Court should not believe the said agreement as pleaded in para. 3 of the plaint as there were certain inherent improbabilities and absurdities in the agreement itself. For example:

(i) The clause regarding the goods being charged for the Plaintiff is clearly absurd because the Appellant Mundul was only an importer or clearing agent in respect of those goods and cannot possibly charge the goods as the goods belonged to the licence holders and not to Mundul and, therefore, it is not possible for Mundul to charge the goods which belonged to some one else, viz. Century. To support his arguments Mr. Bose said that the Plaintiffs were themselves the importers of goods and they well knew that the goods belonged to the licence holder and could not be charged by the importer.

(ii) Even the agreement itself shows that the commission will be paid at 10 per cent which worked out to Rs. 3,000, but in fact the remuneration of Mundul as appears in the books of account was only about Rs. 600. Therefore, there is no reason why Mundul will enter into such an agreement to his detriments.

(iii) There are inherent discrepancies between the pleading and the evidence from which it is abundantly clear that the entire agreement pleaded by the Plaintiff is a moonshine and, as such, the claim of the Plaintiff should be rejected, viz. to take one instance in the pleading it is the clearance from the Port authorities but in evidence the clearance from the Customs etc.

(iv) The subsequent conduct of the parties, particularly the supreme indifference of the Plaintiff for any document or receipt of the sum or from enquiring about the clearance, shows that no such agreement could be possible. Specially, no letter enquiring about-the arrival of the goods was produced.

(v) Exhibit B clearly shows that there could not have been any agreement as stated in the plaint apart from the absence of any receipt for such big sum of Rs. 30,000.

(vi) Mr. Bose drew our attention to the fact that actually the goods arrived by. ''Nachison Maru'' and not ''Narason Maru'' and nobody knew until the arrival of the ship ''Nachison Mara'' that the goods were not coming by Narason Maru, the Plaintiff came out with the story that the name of the ship ''Nachison Maru'' was given, at the time of agreement and so entered in his books on May 29, 1962.

(viii) Elaborate entries in the books of accounts of the Plaintiff''s firm only makes them suspicious. Ledger entry of the Plaintiff firm'' is clearly false as not written chronologically and also makes the'' entire books of accounts of the Plaintiff firm suspect.

Another minor point on probabilities, Mr. Bose states, is that the Court should disbelieve the Plaintiff''s case that he paid the said amount of Rs. 30,000 to the Defendant as Mundul could have no reason to deny the payment from the Plaintiff Mahabir and state that it was received on account of Century.

The main stumbling block of the Plaintiff about the alleged verbal agreement as mentioned in para. 3 of. the plaint is the absence of any contemporaneous document or receipt for the payment of Rs. 30,000. The Plaintiff''s case was that on receipt of certain telephonic conversation Mathur and Bajaj, the partner and the manager of the Plaintiff firm, on May 29 went by bus to the city office of R. B. Mundul and paid Rs. 30,000 in cash to Sri Moni Mohan Mondal, a partner of R. B. Mundul & Co., who after receiving the money dismissed them forthwith stating that he would have to go to the Bank and the two fellows came back quietly to their office at Tollygunge without obtaining any receipt nor any receipt demanded in writing thereafter.

It was alleged by Mathur in evidence that at the time when the payment was made Mondal promised to send the receipt within two/three days. But the astounding feature is that though no receipt was sent within two/three days there was no letter from the Plaintiff''s side demanding such receipt until after four months, i.e. on September 13, 1962, when for the first time the written demand was made.

The Plaintiff''s further evidence was that in the beginning of June 1962 when Mathur and Bajaj again went to the office of Mundul & Co., Moni Mohan Mondal brought out a letter from his drawer, ex. B, and made some endorsement thereon and thereafter asked Akhechand Bajaj to write out a letter on the basis of the one he handed over and said that on receipt of such letter he would grant him the receipt acknowledging the said loan. That letter which was produced by the Plaintiff at the trial containing the endorsement of Mondal were in. the following terms:

Messrs. R. B. Mundul & Co.

29th May, 1962

Dear Sirs,

Re:25 M/Tons spring steel wire shipped per s.s. ''Nachison Maru'' on a/c of M/s....

As per our financing arrangement with M/s Century Engineering Co., we send herewith a sum of Rs. 30,000 (Rupees thirty thousand only) in cash on account of the.price of the above goods so as to enable you to make the necessary payment to the Bank. The said sum is being paid by us on behalf and to the credit of M/s Century Engineering. Co. We have to confirm that no claim shall lie against you for refund of the said sum or any portion thereof on any account whatsoever and we shall look to M/s Century Engineering Co. alone for realisation of our dues.

Yours faithfully,

The Plaintiff''s further evidence was that they refused to sign that letter the draft of which was handed over to them, i.e. ex. B, stating that they did not know Century at all and so came back taking the letter in their pocket. It was really very astounding that even when they were told in June 1962 that no receipt could be granted to them unless they signed- such a letter and though they refused to sign sue!) letter the Plaintiff nonetheless did not record the said loan in a letter or demand any written receipt until, three months thereafter in the middle of September next.

The Plaintiff''s explanation, however, was that as they had several other dealings and transactions with Mondal with regard to the importation and clearing of goods they had implicit faith and confidence on Mondal. So in spite of ex. B they did not think it necessary to record the said loan or to demand the receipt.

The explanation of the Plaintiff was that after all they are entitled to the repayment of the loan with commission of 10 % only on clearance of the said goods and they were keeping a watch if and when the goods arrived. So long the goods were not cleared their loan was not payable and in any event the goods were charged to them, therefore, they had nothing to worry. Only when they came to know that a portion of the goods had already been cleared that they became alert and started demanding the dues.

Both these explanations are not convincing to us.

Now, we shall have to judge the case on evidence, regard being had for natural and normal conduct of the human beings in the dealings and transactions of this nature. We are hot impressed with the oral evidence on behalf of the Plaintiff. The manner of payment of the said loan and the conditions of payment as stated by the Plaintiff seem to us to be not only, unbelievable but also fantastic.

Now, let us come to the defence of the Defendant No. 2, Century Engineering Co. They defended the suit at the trial Court but did not appear before us. Their Solicitor Mr. Kumar appeared before us on the first day and had retired from the case saying that he had no instruction. Of course, Century''s defence in the Court below, inter alia, was that being licence holders they were the owners of the said goods and they paid the said sum of Rs. 30,000 and the same was received by the Defendant No. 1 for and on behalf of Century. Now, the evidence on behalf of Century was that it was Moni Mohan Mondal who himself called at Century''s office-cum-residence at Calcutta and received Rs. 30,000 from Mrs. Rachel Sen, the European wife of Mr. Nihar Sen, proprietor of Century. Of course, that was denied by Mondal who said that a peon came to his office and paid him Rs. 30,000 which Mondal deposited on account of Century.

The Court below disbelieved the evidence on behalf of Century, and reading the evidence as a whole we have no doubt that Century did not pay the said sum of Rs. 30,000 to Mondal nor they had the capacity or means to pay at the relevant time.

One interesting feature in this case is a person called Sri C. L. Bagri who was present at all material times but mysteriously vanished at the time of trial.

This C. L. Bagri was at all material time an employee of the Plaintiff''s firm. According to the Defendant No. 1, this C. L. Bagri was also working for Century and, according to Mondal, there must have been some sort of arrangement through Bagri between the Plaintiff''s firm and Century in respect of clearance of the said 25 M.T. spring steel wires. The Plaintiff denied that they knew that their employee C. L. Bagri was also working for Century though there was evidence to the contrary. But this Bagri, though he filed an affidavit on behalf of the Plaintiff, during the interlocutory proceedings was not produced as a witness and was stated, to be untraceable by the Plaintiff at the time of hearing.

The unsigned letter, ex. B, bearing-the date May 29, 1962, refers to a financial agreement between the Plaintiff''s firm and Century and this letter, according to the Plaintiff, came into existence during the first week of June 1962 and, according to the Defendant N O. 1 R. B. Mundul, this letter, came into'' existence in "the first week of September 1962 when it was brought by Bagri. But whatever may be the actual date of the letter this unsigned letter at least goes to prove this fact that on whatever date it was brought into existence this letter shows that both the Plaintiff and Mundul were informed that this amount of Rs. 30,000 which was paid by the Plaintiff to Mundul was paid on account of Century and "the money, was repayable by Century. According to the Plaintiff, this letter was produced by Mundul to the Plaintiff and, according to Mundul, this letter was produced by Bagri on behalf of the Plaintiff to Mundul. Be that as it may, it is clear that a dispute was raised at the time when the letter was brought into existence about who was liable to repay the amount which was paid by the Plaintiff. But in respect of this the Plaintiff docs not immediately put anything in writing or take any step to safeguard his right or interest and, on the other hand, the Plaintiff is put to the - knowledge that this amount was payable by Century to the Plaintiff. Therefore; this letter cuts at the very root of the Plaintiff''s case as well as of the Defendant''s defence. As stated before the conduct of both the Plaintiff and the Defendant No. 1 are so incongruous that it is difficult to believe either the Plaintiff''s case or the" Defendant No. l''s case.

As stated earlier, before the trial Court different contradictory cases were made out by the three parties, the Plaintiff, the Defendant No. 1 and the Defendant No. 2, about the payment of the said sum of Rs. 30,000 to Mundul. The Plaintiff''s case was that Bajaj and Mathur paid to Moni Mondal, Mondal''s case was that it was paid to him by a peon on- account of Century and Century''s case was that Mondal personally went to Mrs. Sen and received the same from her.

We have no hesitation in coming to the finding that neither the Plaintiff''s story nor the story of Century is wholly true. But the fact remains that Mundul got Rs. 30,000 on May 29, 1962. It is abundantly clear from the evidence that Century had no means at that time to pay this amount. And Century admitted that when necessary it borrowed money from Marwaris.

As Century did not pay this amount, this amount must have been paid by the Plaintiff which incidentally is a Marwari firm. Of course, the Defendant No. 1 wanted to argue that even it was not possible for the Plaintiff to pay as they had just a little more than Rs. 30,000 in cash with them on that date and it is unlikely that a firm of its standing should pay practically everything they had for this transaction But, strangely enough, the Bank account of the Plaintiff was not disclosed nor any question was'' asked about the financial stability of the Plaintiff in cross-examination. But, nonetheless as admittedly this amount did not belong to Mundul and could not be paid by Century, we have no doubt that this amount was paid by the Plaintiff. If this amount was paid by the Plaintiff to Mundul, then we shall have to consider what are its consequences. But, before we come to that let us consider how far the Plaintiff''s evidence can be believed.

The Plaintiff''s case definitely was that two/three days prior to May 29, 1962, Moni Mohan Mondal wanted a temporary financing accommodation from the Plaintiff to enable it to clear the shipping documents, viz. 25 M.T. spring steel wires per ship ''S.S. Nachison Maru'' under (''he terms and conditions stated in para. 3 of the plaint cited above. It has come in evidence that the Plaintiff was also manufacturer of umbrella ribs and also importer of spring steel wires and as a matter of fact the Defendant No. 1 acted as a clearing agent of the Plaintiff firm in respect of other consignment of spring steel wires earlier.

It has also come in evidence that the Defendant N6.1 was not the manufacturer of umbrella ribs and the licences for umbrella ribs were given to the actual users. Therefore, the Defendant No. 1 though were importers were not manufacturers and the Plaintiff though manufacturers were not importers of these spring steel wires. Under the licensing rule prevailing at the relevant time only the actual users are granted licence for importation of spring steel wires. The licence for the said 25 M,T. spring'' steel wires were issued in the name of Century. It has also come in evidence,, that Century was constructing a factory for manufacturing umbrella ribs in Assam though at the relevant time it only started establishing a factory, but the factory was not completed.

From these three things it is clear that though the Plaintiffs Were in a position to use spring steel wires for manufacturing but they were not the licence holders. These spring wires were imported by Mundul by virtue of letter of authority, but they could not use it. They were not entitled under the law to import it as actual users, so they were importing under the licence of Century. Century had licence but neither had the means to pay for the said steel wires or to use them.

Negatively, the Plaintiff cannot buy legally the said spring steel wires from Mundul. Mundul cannot legally sell or use the said spring steel wires which were imported on behalf of Century and Century had neither the means to pay or to use the said steel wires or to sell them legally though they were the licence holders and so had the title.

Therefore, it is possible that there was some unholy alliance between these three persons about. the use of the said steel wires which were being imported and for that the Plaintiff paid the sum and there might be some arrangement other than with which either the Plaintiff or the Defendant No. 1 or the Defendant No. 2 came before the Court. In any event, the agreement in its entirety as pleaded by the Plaintiff is unbelievable from their conduct and the circumstances and the evidence.

The Plaintiff in doing this particular type of business of manufacture certainly knew very well that the goods which were imported under someone else''s licence cannot be charged by the importer. Apart from the fact there was no receipt nor was any written demand for receipt for such a large sum. The Defendant No. 1 has drawn our attention to a letter dated September 5, 1962, ex J., which was a letter written to the Plaintiff by the Defendant No. 1 from which it is clear that though the Plaintiff wrote a letter to the Defendant No. 1 on August 28, 1962, even in that letter there was no mention about this alleged loan of Rs. 30,000.. So, though the money was paid by the Plaintiff to the Defendant No. 1 for some purpose on May 29, 1962, there was complete silence upto September ] 3, 1962, about the said payment. This silence which was broken at last can only be explained by the fact that some unholy negotiations fell through.

The learned Judge of the Court below has disbelieved both the Defendant No. 1 and the Defendant No. 2 on the relevant point about the payment of money and by whom. He has disbelieved Mundul''s statement that a ''peon made the payment. He has disbelieved Century on the question of payment. We are entirely in agreement with the learned Judge about his findings of these facts. We also disbelieve the Plaintiff''s case as pleaded in para. 3.

The learned trial Judge has, of course, in his judgment accepted the Plaintiff''s version of the case but, as stated earlier, we do not agree with him and we are of the opinion that the Plaintiff has also not placed all his cards of his dealings before us and we are unable to accept the Plaintiff''s version as-stated before the Court below. But, we are of opinion that the said sum of Rs. 30,000 came from the Plaintiff''s offer.

In the plaint, in para. 8 the Plaintiff has stated that even if the agreement as pleaded in para. 3 fails they are entitled to recover from the Defendant No. 1 who has. received this sum for the Defendant No. 2 as agent. On this aspect of the case the learned Judge has held:

On this evidence I am unable to accept the argument advanced on behalf of the Defendant No. 1, that payment of money was made by the Plaintiff on behalf of Century Engineering Works.

in our view, the following facts militate against the said findings of the learned Judge.

Exhibit B was the document produced by the Plaintiff in this case. Exhibit B, which was the first document, clearly shows that the Plaintiff has to look to the Defendant No. 2 for payment. It is strange that though ex. B was known to the Plaintiff either in June 1962 as Plaintiff''s case or in September 1962 as Defendant No. l''s case, the Plaintiff docs not mention anything about the said ex. B in his letter dated September 13, 1962. Therefore, though the Plaintiff knew about it either in June or in September he thought fit not to mention anything about it in any of his correspondence and suppressed it.

The next fact is C.L. Bagri, who was as alleged serving both the masters, the Plaintiff and the Defendant No. 2, and perhaps was the villain of the piece of this case, was kept away by the Plaintiff by stating that he was absconding. We have no hesitation in coming to the finding that the Plaintiff knew very well that Bagri who was their Manager was also acting for Century. From the witness-box the Plaintiff wanted to give the impression that they did not know anything about Century, We are of the opinion that the Plaintiff was suppressing their knowledge about Century with some ulterior motives. Firstly, both being in the same line of trade and having a common importer, it. is expected that they knew each other and, secondly, it is clear from the evidence of Nihar Sen that he knew the partners of the Plaintiff''s firm, Khemchand Bajaj, Pachcsia and Mathur, Qs. 235, 249, 253, 321 -to 325. Mr. Sen also stated that he knew that Bagri was an employee of the Plaintiff, and that was not challenged in cross-examination.

From these facts it is quite possible that the Plaintiff knew that the. said goods were being imported by the Defendant No. 1 for the Defendant No. 2 and, therefore, perhaps for the intention in getting these goods the Plaintiff paid the said sum of Rs. 30,000- to the Defendant No. 1 on behalf of the Defendant No. "2, i.e. the Defendant No. 2 was the disclosed principal for whom the Defendant No. 1 accepted the amount as alleged.

Alternatively, an attempt was also made by the Plaintiff Respondent before us that though Section 70 of the Contract Act has not been pleaded the Plaintiff should be given a decree for the said sum u/s 70 of the Contract Act. We shall discuss it later on.

On the ground the suit being premature, Mr. Shroff for the Respondent drew our attention that this issue was not raised by the Appellant in the trial Court and, therefore, the Appellant should not be allowed to agitate this point. Apart from the fact that under Order 6, Rule 6-, Code of Civil Procedure, the condition precedent need not be pleaded, but reliance was also placed in Janki Ram v. Nilkanta AIR 1962 S.C. 634 which says:

In construing the plaint the Court must have regard to all, the relevant allegations made in the plaint and must look at the substance of the matter and not its form.

Mr. Shroff also stated from ex. Z (50 at p. 382 of the paper book) by letter from Mundul to Century, it was disclosed that the goods were cleared on October 22, 1962, and drew our attention to Qs. 637 and 638 of the evidence of Mundul. Apart from that, Mr. Shroff drew our attention to Ramnath Verma Vs. State of Rajasthan, and also the case of Bidyasagar Cotton Mills v. Mst. Najimunnessa 68 C.W.N. 702 which support that even if the suit is premature the Plaintiff is entitled to a relief on the.facts and circumstances of the case. Mr. Shroff drew our attention to Bhagwdti v. Chandramul AIR 1906 S.C. 735 following the case of Rajmohan v. Manzoor AIR 1943 P.O. 29, and in all these cases it has been held that if the Plaintiff fails to bring his case within the four corners of the plaint and on the issue raised nonetheless the Court can grant him relief provided it is just and proper. In the case of Bhagwati v. Chandramul AIR 1906 S.C. 735 it is stated:

There can be no doubt that if a party asks for a relief on a clear and specific ground, and in the issues or at the trial, no other ground is covered either directly or by necessary implication, it would not be open to the said party to attempt to sustain the same claim on a ground which is entirely new... a party cannot be permitted to justify its claim on a ground which is entirely new and which is inconsistent with the ground made by it in its pleadings.... But where the substantial matters relating to the title of both parties to the suit are touched, though indirectly or even obscurely, in the issues, and evidence has been led about them, then the argument that a particular matter was not expressly taken in the pleadings would be purely formal and technical and cannot, succeed in every case.

It is based on the theory that consideration of form cannot override the legitimate considerations of substance.

Mr. Shroff, appearing for the Respondent, also drew our attention to another Supreme Court case, V.R. Subramanyam Vs. B. Thayappa and Others, , which is a case for granting compensation u/s 70 when the Plaintiff has failed to prove the expressed agreement.

Mr. Bose, appearing for the Appellant, on the other hand submitted that the Respondent in any event cannot get a decree in terms of Section 70 of the Contract Act or u/s 65 because that has not been pleaded in the plaint. It is a well-known proposition of law that the cause of action for which a relief can be granted must be pleaded to eliminate the element of surprise and prejudice. In support of his contention Mr. Bose drew our attention to B.N. Elias and Co. Ltd. Vs. State of West Bengal, . On the first point of Mr. Bose that the cause of action of this case was the clearance of the goods and the goods not having been cleared on the date of institution of the suit on November 13, 1962, the suit should have been dismissed as from the evidence it is clear that ultimately the goods were actually cleared after February 1965 (See Qs. 237 to 251 of Moni Mohan Mondal). Apart from the fact of Qs. 206 to 210 of Mathur which says on the date of injunction 12 tons were detained by the Customs and further 7 tons were by the Bengal Bonded Warehouse. The date of injunction being November 13, 1962.

In the case cited from the Bar, Raichand Mondal v. Biswanath Mondal 20 C.L.J. 107 Sir Asutosh Mookherjee J. has held:

That a Court may take notice of events which have happened since the institution of the suit and afford relief to the parties on the basis of the altered conditions. This doctrine is of an exceptional character and is applied in cases where it is shown that the original relief claimed has, by reason of subsequent change of circumstances, become inappropriate, or, that it is necessary to base the decision of the Court on the later circumstances in order to shorten litigation or to do complete justice between the parties. A similar view has been taken in England in, Attorney-General v. Birmingham Drainage Board, (1912) A.C. 788 (802), where the principle is recognised that on appeal such a judgment may be given as ought to be given if the case came at that time before the Court of first instance.

The other cases cited from the Bar are Perumal Chettiar Vs. Kamakshi Ammal, and Sheo Nath Prasad Vs. Sarjoo Nonia and Another, . Both of them are Full Bench decisions on the cases of promissory notes and it is laid down that, even if the promissory note being improperly stamped cannot be admissible in evidence, the party can lead other independent evidence to prove the loan.

In the case of Subbaraya Cheity v. Nachiar Ammal AIR. 1918 Mad. 143, which is a Bench decision, which decided:

The Courts have power, in certain circumstances, to grant a degree in a case where the cause of action arose subsequently to the filing of the plaint. In a suit for money where the money becomes payable to the Plaintiff only after the filing of the suit, the Court should pass a decree in favour of the Plaintiff and not compel him to institute another suit for the purpose.

On the question of agency it is argued that if Mondal was acting as an agent for Century then Century is a disclosed principal and, therefore, Century is liable as the principal is liable for loss or injury caused by the wrongful act of an agent.

In the case of Rahimullah Khan v. Chunilal AIR 1937 Lah. 570, which says:

Where, by any wrongful or unauthorised act of an agent the money or property of a third person comes to the hands of the principal or is applied for his benefit, the principal is liable jointly and severally with the agent-to restore the amount or value of such money or property

The following cases were also cited:

In the case of Village Panchayat of Jangareddigudem Vs. Kommireddy Narasayya, , the Court granted relief following Section 70 of the Contract Act though there was no expressed pleading. In the case of R. Gangapathi Pillai Vs. P.A. Irudayasamy Nadar, , where the claim for compensation which was based on the contract for reimbursement cannot be proved, the claim was decreed u/s 70 of the Contract Act.

On the contention whether Section 70 contemplates the ''payment of money'', it was decided in Rameswarlal Bagla and Others Vs. Bezonji Barjorji Nadadwalla and Another, and Mulamchand Vs. State of Madhya Pradesh, that Section 70 includes the payment of money.

In the case of Rameswar Lai Bagla v. Beneji Barjaji Nadar the learned Judges held:

This is not a case where One party had ''become entitled by reason of the other party in default to put an end to the contract, nor is it a case where -a contract has become violable at the option of one party u/s 64. But that is no reason why the Plaintiff firm should not get back the moneys which they had advanced when according to the learned Judge''s finding a variation was agreed upon between the parties as aforesaid. There was no agreement that the Defendant firm would be entitled to retain or to forfeit any part'' of Rs. 11,200 which had been advanced or paid by the Plaintiff firm. In this state of things it would be contrary to equity and justice to refuse any relief to the Plaintiff firm... call it money had and received or money held by the Defendant firm to the use of the Plaintiff firm or money due on failure of consideration the Defendant firm must repay....

Section 70 of the Contract Act says:

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.

Mr. Shroff, appearing for the Respondent, as an alternative argument stated, before us that even if we disbelieve this contract as pleaded nonetheless he is entitled to get a decree for the sum claimed on this principle as stated in Section 70 of the Contract Act. According to him, he had lawfully paid the said sum of Rs. 30,000 to Mundul not intending to do so gratuitously and Mundul has received the benefit thereof, and, therefore, Mundul is bound to repay.

Certain difficulties arise, firstly, as we have stated earlier, this section was not pleaded in the plaint at all nor was urged before the Court below nor any evidence led on this or any issue raised. To allow the Plaintiff to raise the issue of Section 70 in this appeal stage will be unjust and improper as it will be a surprise for the Defendants and. they will be seriously prejudiced not having been able to meet the point at the trial stage. That being the case the Plaintiff firm are not entitled to relief u/s 70 or Section 65 of the Contract Act: Rajmohan v. Manzoor ( Supra).

Another point on Section 70 is that the act must be done lawfully for another person for the benefit of such person. Now, in this particular case, as stated earlier, we have grave doubts about the legality of the transaction and about the benefit, true there was apparent benefit to Mundul, but the ultimate benefit was for Century because Century was a licence holder and he was the person who received the goods.

So, in our opinion, Mundul is not liable to compensate the Plaintiff.

Therefore, we hold for the reasons stated earlier that:

(i) The suit should not be dismissed on the ground that it is premature.

(ii) The Plaintiff has failed to prove his case as pleaded in para. 3 of the plaint.

(iii) By and large the evidence on behalf of the Plaintiff was unreliable and, in our opinion, the Plaintiff has suppressed the material facts from the Court.

(iv) The Defendant No. 1 Mundul has not told the whole truth before the Court below and his evidence is not reliable.

(v) The Plaintiff has been able to prove the case as pleaded in para. 8 of the plaint to the extent that the Defendant No. 1 received the said sum of Rs. 30,000 from the Plaintiff as an agent of the Defendant No. 2.

(vi) The Plaintiff is not entitled to get a decree alternatively u/s 70 of the Indian Contract Act against the Defendant No. 1 inasmuch as that case has never been made out cither in the plaint or in the evidence or in the argument nor was it an issue before the Court below.

In that event of the matter, we set aside the order and decree of the Court below. There will be a decree for Rs. 33,000 with interest at 6 % on the principal sum of Rs. 30,000 and costs of the appeal Court and the Court below against the Respondent No. 2, Century Engineering Works, in favour of the Plaintiff.

We, therefore,. allow the appeal of R. B. Mundul & Co. and the decree and order of costs against them set aside.

But, in the circumstances of the case, the Appellant R. B. Mundul & Co. is not entitled to any costs.

Certified for two counsel as against respective clients.

Sankar Prasad Mitra, J.

I agree.