S. Narayanan vs The Dist. Board

Rajagopalan, J.—Ex. P. 1 is the contract of service which the resp., the Dist. Board, Salem, & the pitf.-applt. entered into for the

employment of the pltf. as the medical officer in charge of a rural dispensary for a period of three years. The pltf. was first posted to Elachipalayam

as medical officer of the rural dispensary there. On 3-6-1941, the services of the pltf, were terminated (vide Ex. P. 4). On appeal to the Govt. the

pltf. was reinstated in service on 31-12-1941. He was out of office between 3-6-1941 & 31-12-1941.

The pltf. folld. up his reinstatement by instituting the suit out of which this second appeal arises. He claimed Rs. 287-7-0 by way of subsidy from

deft. 2, Rs. 338-11-0 by way of damages from deft. 1 the Dist. Board, &, in the alternative, the entire sum of Rs. 626-2-0 as damages from deft.

1, the District Board. The trial Ct. held that the dismissal of the pltf. was wrongful; but the learned Dist. Munsif upheld deft. 1''s contention, that the

suit was barred by Section 225, Madras Local Boards Act, as it had been instituted more than six months from the date on which the cause of

action arose. The pltf.''s suit was dismissed. At the stage of appeal, deft. 1, District Board accepted the correctness of the finding of the trial Ct.

that the dismissal of the pltf. was wrongful. The only question that the learned Dist. 3. considered was whether Section 225, Madras Local Boards

Act, was a bar to the pltf''s claim. The learned Dist. J. agreed with the learned Dist. Munsif on that issue & the appeal was dismissed. The second

appeal has been preferred by the pltf. & the only resp. in the second appeal Is the District Board.

The main contention of the learned advocate for the applt. was that Section 225, Local Boards Act & the special period of limitation prescribed

there under did not apply to a suit to enforce contractual obligations incurred under a contract entered into by the District Board & a person like

the pltf.

Section 225 runs:

No suit or other legal proceedings shall be brought against any local Board..... .in respect of any act done or purporting to be done in execution

or intended execution of this act or any rule, by-law, regulation or order made under it or in respect of any alleged neglect or default in the

execution of this act or any such rule, by-law, regulation or order until the expiration of two months next after notice In writing....

Every such proceedings shall, unless it is a proceeding for the recovery of immovable property or for a declaration of title thereto, be

commenced within six months after the date on which the cause of action arose.

The learned Dist. J. seems to have based his decision in this case that Section 225 applied to the pltf''s claim, or. Athimannil Muhammad Vs. The

Malabar District Board, . ""Varadachariar J. observed at p. 749 thus :

The real test is whether what is complained of is some act done in pursuance of the statute. In cases where there is no dispute as to the existence

of a contract, all further rights & liabilities between the parties are governed by the ordinary law relating to contracts; & it Is true enough, in such a

case, to say the rights and liabilities of the parties in respect of the contract are matters of ordinary law & not matters governed by the statute. But

where, as in the present case, we find chat the cancellation of the acceptance of the pltf.''s offer is the necessary result of what the President

thought, in accordance with the terms of the Act as he interpreted then, his duty to accept, viz., the highest tender........we cannot say that the

question does not relate to an act done under the statute. The right to levy tolls is a special privilege conferred by the statute upon local bodies, &,

under the terms of Section 106 (1), Local Boards are authorised either to manage the collection of the tolls themselves or through their own agency

or to lease them out. In either case, what the President as representing the Board does in connection with the leasing out of the right to levy tolls is

undoubtedly an act done in execution of his powers or duties under the Act.

The scope of the principles which underlay the actual decision in Athimannil Muhammad Vs. The Malabar District Board, was discussed by

Beasley C. J. in Padmanabhuni Narasimhadas Vs. Dist. Board of Kistna, . Referring to the claim in Athimannil Muhammad Vs. The Malabar

District Board, , Beasley C. J. observed :

There, the suit was filed..... .claiming damages on the ground that its President Improperly cancelled a contract of lease......The president in

performance of what he thought was his duty under the Madras Local Boards Act, as he interpreted the same, accepted a higher offer by an other

person & the cancellation of the acceptance of the original offer was the necessary result......

The claim Beasley C. J., had to adjudicate upon was for the recovery of the balance of an amount due to the pltf. under a contract made with the

District Board. Applying the rule which is formulated In Athimannil Muhammad Vs. The Malabar District Board, , Beasley C. J. was of opinion

that the claim based upon the contract, that is, upon a breach of the contract, was outside the scope of Section 225, Madras Local Boards Act. In

reaching that decision, Beasley C. J. relied upon a decision of Venkataramana Rao J. in ''C. R. P. 1913 of 1934''.

Varadachariar J. himself, who delivered the judgment in Athimannil Muhammad Vs. The Malabar District Board, held in T. Sivasankaram Pillai

and Another Vs. Taluk Board of Penukonda and Others, .

The provision for notice in Section 225 as well as the enactment of a shorter period of limitation are co-extensive except as regards suits for

immovable property. There is always a distinction between the cases in which notice is necessary u/s 225 & the cases in which notice is not

necessary. Where on the allegations in the plaint, the suits do not arise out of anything done by the Board in the discharge of a statutory duty, the

suits are maintainable without issue of notice & are not barred by limitation under the special provisions of Section 225.

In that case, the claim was for reimbursement under an arrangement agreed to by the Taluk Board of Penukonda to pay the pltf the expenses

incurred by him In certain contemplated proceedings. The claim was on the basis of a breach of the contract.

It may be recalled that In Athimannil Muhammad Vs. The Malabar District Board, it was a statutory right that the President exercised--a

statutory liability that he discharged in entering into a contract of lease for the collection of tolls. The contract Varadachariar J. had to consider in T.

Sivasankaram Pillai and Another Vs. Taluk Board of Penukonda and Others, was obviously not such a contract; nor is the contract, Ex. P. I we

have to consider in these proceedings such a contract. True under Sen. V, Rule 1 (A) h), Local Boards Act, the President had a right to maintain

dispensaries. But, in the maintenance of dispensaries, if he chose to employ a medical officer & chose to enter into a contract with him it might be

ultimately to discharge his liability & exercise the right conferred upon the President by Clause (h) of Rule 1 (A) of Schedule V. But such a contract

was only incidental to the discharge of that liability & the exercise of that right by the President. The contract itself was not entered into in the

exercise of any specific direction to that effect in the statute. In The District Local Board of Poona Vs. Vishnu Raghoba Waderkar, Patkar J.

pointed cut with reference to a similar contract that

the performance of the contract is only Incidental to the statutory powers of the Local Board.

That, it seems to me, is the real distinction. Where he contract is entered into in the direct exercise if a statutory power by the President it would

come within the scope of Section 225. That was what was really decided in Athimannil Muhammad Vs. The Malabar District Board, . But where

the contract is only incidental to the exercise of a statutory power, he claim based upon such a contract will not be hit by the special statutory

restrictions embodied in Section 225, Local Boards Act. That was really the basis on which T. Sivasankaram Pillai and Another Vs. Taluk Board

of Penukonda and Others, & Public Prosecutor Vs. Captain R. Rajagopalan, were decided & it was on analogous principles that The District

Local Board of Poona Vs. Vishnu Raghoba Waderkar, was decided. It is unnecessary to go further back & refer to ''Municipal Council,

Kumbakonam ''v. Veeraperumal Padayachi'', 28 ML J 147: AIR 1916 Mad 310 or ''Mayandi v Me Quohae'', 2 Mad 124.

The learned Dist. J. referred to Ivaturi Veera Subramanyam and Others Vs. President, District Board, ; but that did not deal with a claim based

upon any contract. It was a fatal accident that was complained of & that constituted the basis of the claim. The contention of the learned Advocate

for the applt. that the learned Dist. J. misconstrued the scope of Athimannil Muhammad Vs. The Malabar District Board, is well-founded. The

learned Dist. J.''s attention does not appear to have been drawn to T. Sivasankaram Pillai and Another Vs. Taluk Board of Penukonda and

Others, .

I reverse the finding of the learned Dist. J. & also that of the learned Dist. Munsif on the question of limitation. The decree of the lower appellate

Ct. is set aside & the appeal is remanded for disposal afresh. The other questions for determination will have to be dealt with.

The learned advocate for the resp. pointed out that Clause 13 of Ex. p. 1 barred by itself a suit where the final decision had been given on the

questions at issue between the parties, that is, the pltf. & deft. 1 by the Govt. Whether that contention is well-founded or not will also be one at the

points for the lower appellate Ct. to decide.

The second appeal is allowed & the appeal is remanded to the lower appellate Ct. for disposal in the light of the observations made above.

Costs in this appeal will abide the result & will Be costs in the cause.

The Court-fee paid on the memo, of the second appeal will be refunded.

C. M. P. No. 2093 of 1949'' : This is an appln. to admit additional evidence in the second appeal. It does not, however, arise. The applt., if so

advised, may apply to similar effect when the appeal comes on for hearing afresh before the lower appellate Ct.

The petn. is dismissed.