T.H.D.C. Education Management Board vs Shri Meharban Singh

Rajesh Tandon, J.—Heard Shri U.K. Uniyal, Sr. Advocate, assisted by Shri Shobit Saharia, counsel for the appellant and Shri Rajendra Dobhal, coulsel for the respondent.

By the present second appeal filed u/s 100 of Code of Civil Procedure, the appellant has prayed for setting aside the judgment and order dated 27.8.2005 passed by the Additional District Judge/FTC VI, Dehradun in Civil Appeal No. 45 of 2002.

Briefly stated, a suit being No. 45 of 20,00 was filed by the plaintiff Meharban Singh praying for a decree for realization of Rs. 35,776.88 as well as for pendentelite and future interest @ 24% per annum. The trial court has decreed the suit. Against the judgment and decree passed by the trial court, an appeal was preferred which was allowed. Hence the present second appeal has been filed.

According to the case of the plaintiff, he is owner of the public carrier (Vikram). The defendant has invited the quotations for commutation of children studying in his schools to various examination centres by three wheeler (vikram). For the year 1999-2000 the defendant has invited the quotations from vikram owners for the aforesaid purposes. The plaintiff has also bid for the same and since the rate of his quotation was lowest, his quotation was accepted and he was assigned the job of carrying the students of class IX and class X to various examination centres fixed for their Board examinations. The plaintiff has effectively completed his job. In paragraph 6 of the plaint, the plaintiff has given the details of the job done by him, which is quoted as under:

---------------------------------------------------------------------------------- Class Centre Trips @ Rate Amount (in Rs.) ---------------------------------------------------------------------------------- Xth Doodhle 28 370.00 10360.00 Xth Doiwala 43 220.00 9460.00 Total 19820.00 IX Doiwala 47 220 10340.00 Grand Total 30160.00 ----------------------------------------------------------------------------------

The plaintiff has stated that inspite of the various reminders and requests, the defendant has not released the said amount to the plaintiff. The plaintiff has sent a notice on 26.10.1999 and the defendant was asked to pay the amount of Rs. 30160/- alongwith interest at the rate of 24% within 15 days from the date of receipt of the notice which was served upon the defendant on 28.10.1999 but inspite of the service of the notice, the defendant has not paid the amount. The plaintiff has claimed the amount to the following effect:

(a) Principal amount Rs. 30160/- (b) Interest @ 24 % from 1.6.1999 to .2.2000 Rs. 5066.88 (c) Cost of Notice Rs. 550.00 ------------- Total RS. 35776.88 -------------

A written statement was filed by the defendant. So far as the averments of the plaintiff to the effect that he is the owner of vikram has not been denied. However, the defendant has denied that any quotation was invited. In paragraph 5 of the written statement, it has been submitted that the rates as available with the THDC Education Management Board for the year 1999-2000 were Rs. 120/-for Doiwala and Rs. 240 for Dudli and these rates were informed by the THDC to the plaintiff and he has agreed to work on these rates. In paragraph 8 of the written statement, it has been submitted that a cheque for a sum of Rs. 16,200/- was sent to the plaintiff vide letter No. 3418 dated 79.1999 and again vide letter No. 3679 dated 18.9.1999 which were returned by the plaintiff. In reply to paragraph 11 of the written statement, the defendant has stated that the plaintiff is not entitled to any sum over Rs. 16,200/-. The plaintiff has refused to accept the said sum, therefore, there is no question of any interest being payable to him. It has also been submitted that since there was no agreement between the plaintiff and the defendant for payment of any interest, no such interest can be awarded. In the additional pleas, the defendant has admitted that every year the conveyance is being provided to and fro from the school to the centre and for the said purpose no tender/contracts are invited. The payment is made by the management board to the Vikaram owners who are arranged/hired by the villagers and the Gram Panchayat, Athuruwala. The defendant has submitted that the Vikaram is hired by the villagers/Gram Panchayat for transportation of their children and there is no privity of contract between the Vikaram owner and THDC Education Management Board.

Counsel for the appellant Shri U.K. Uniyal has vehemently submitted that since, there was no contract between the answering defendant-appellant and the plaintiff-respondent, therefore, the defendant was not liable to pay the amount. Paragraph 22 of the additional pleas of the written statement is quoted below:

That for the year 1999 no tender or quotation was invited by the answering defendant nor any work order issued by the answering defendant nor any contract was signed or executed by the answering defendant with the plaintiff.

As will appear from paragraph Nos. 8 and 23 of the written statement, it has been admitted by the appellant that the plaintiff has rendered his services and the dispute was only with regard to the rate offered by the plaintiff. The same are quoted below:

That the contents of para 8 of the plaint as contained therein are totally wrong, false and denied. A cheque for a sum of Rs. 16,200/- was sent to the plaintiff vide letter No. 3418 dated 7.9.99 and again vide letter No. 3679 dated 18.9.99 which both times has been returned by the plaintiff.

That after the completion of the examination the answering defendant received a request for payment @ Rs. 220/- for Doiwala and 370/- for Dudli which was extremely on hire side as confirmed to the rates available with the answering defendant and consequently after enquiring into the matter it was decided that a sum of Rs. 16,200/- only shall be released by the answering defendant by way of Aid keeping in view the rates of Rs. 120/- and 249/-.

The plaintiff has also filed a replication and in reply to paragraph 5 of the written statement, it has been denied that the rates available with the THDC Education Management Board for the year 1999-2000 were Rs. 120/-for Doiwala and Rs. 240/- for Dudhli and these rates were informed by the THDC to the plaintiff. In reply to paragraph 8 of the written statement, the plaintiff has submitted that since the defendant has not paid the amount as per demand, the plaintiff has refused to accept the same. The same is quoted below:

That with regard to contents of para 8 of written statement it is submitted that as per the rates agreed the total amount payable to the plaintiff is Rs. 30,160 which the defendant has not paid despite repeated reminders and requests. Only this much is admitted that a cheque for a sum of Rs. 16,200/- was sent to the plaintiff. The plaintiff has rightly refused to accept the same as the amount was not the full payment of the work which was effectively completed by the plaintiff. The defendant was bound to release the full amount which comes to Rs. 30160/-.

Counsel for the appellant has submitted that in view of the Article 299 of the Constitution of India, a contract is necessary before invoking for the payment of the amount. Article 299 of the Constitution of India is quoted below:

Contracts. - (1) All contracts made in the exercise of the executive power of the Union or of a State shall be expressed to be made by the President, or by the Governor [***] of the State, as the case may be, and all such contracts and all assurances of property made in the exercise of that power shall be executed on behalf of the President or the Governor [***] by such person and in such manner as he may direct or authorize.

(2) Neither the President nor the Governor [***] shall be personally liable in respect of any contract or assurance made or executed for the purposes of this Constitution, or for the purposes of any enactment relating to the Government of India heretofore in force, nor shall any person making or executing any such contract or assurance on behalf of any of them by personally liable in respect thereof.

Article 299 of constitution of India deals with the contracts in exercising of the executive power of the Union or of State. Article 299 of Constitution of India is not applicable in the present case as it will not debar a private negotiation for the education facilities as stated by the defendant for the seasonal purposes as the contract was not entered into in exercise of the executive power of Union or of State and, as such, Article 299 has no application in the present case. As already stated above, this is a case of exploitation of a labour, the facilities of whom have been obtained by the defendant and the payment is being denied.

The appellate court has also relied on the paper No. 31 ga and 33 ga. The same has been relied by the trial court to the following effect:

dsoy nks dkxt 31 x o 33 x ewy :i ls izfroknh ds vf/kdkjh;ks us oknh dks fy[ks ftUgs nksuks i{kks us Lohdkj fd;k gS] gh izfroknh }kjk fy[ks nLrkost gS ftlds vuqlkj mUgksus 16200 :0 dk psd oknh dks Hkqxrku ds lanHkZ es fn;k gS AvkSj mDr lanHkZ es izfroknh dk ;g dguk fd mUgksus Ldwy desVh ds }kjk pSfjVh ds rkSj ij mDr /kujkf''k Lohd`r dh A Loa; lk{kh oknh ih0MCyw01 vius c;ku es ;g ckr Lohdkj djrk gS A fd izfroknh ds lkFk mudks dksbZ fyf[kr le>Skrk ugh gqvk] dksbZ fyf[kr dwVs''ku Hkh ugh fn;k x;k A dsoy tqckuh dke djus ds dgus dh ckr fy[kh gS] ftlds lUnHkZ es izfroknh dh vksj ls ;g rdZ fn;k x;k gS fd izfroknh ,d lgdkjh laLFkk gS vkSj muds leLr dk;Z fyf[kr es gh fd;s tk ldrs gSA tqckuh dksbZ djkj Hkh ekU; ugh gS A

Counsel for the appellant has also referred the judgment of Sohan Lal (dead) by L.Rs. Vs. Union of India and another, , where it has been held in paragraph 6 as under:

No contract is enforceable against the Union of India, unless the mandatory requirements or Article 299 of the Constitution have been complied with. As stated by this Court in The Bihar Eastern Gangetic Fishermen Co-operative Society Ltd. Vs. Sipahi Singh and Others, :

it is now well settled that the provisions of Article 299 of the Constitution which are mandatory in character required that a contract made in the exercise of the executive power of the Union or of a State must satisfy three conditions viz. (i) it must be expressed to be made by the President or by the Governor of the State, as the case may be; (ii) it must be executed on behalf of the president or the Governor, as the case may be, and (iii) its execution must be by such person and in such manner as the President or Governor may direct or authorize. Failure to comply with these conditions nullifies the contract and renders it void and unenforceable.

The Article 299 of the Constitution of India relates to the contract which are mandatory against the Union of India. In the case of THDC, it will not apply inasmuch as for the THDC, as already admitted in paragraph 8 and 12 of the written statement that the amount of Rs. 16,000/- was sent to the plaintiff, who has refused to accept the same. In paragraph 8 of the written statement, it has been stated that a cheque for a sum of Rs. 16,200/- was sent to the plaintiff. There is nothing on the record to show that the plaintiff has not rendered the service for the defendant at the instruction of the defendant.

It is well settled that even if there is no document in writing even then promissory estoppel applies in view of the judgment of Food Corporation of India and Others Vs. Babulal Agrawal, , where it has been held that in case one who holds out a promise, backs out, he will have to compensate the party who acted bona fide on the basis of promise made. The Apex Court has relied on the various judgments, namely, Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh and Others, and Employees'' State Insurance Corporation Vs. Apex Engineering Pvt. Ltd., and has held that non-execution of the contract in terms of Article 299 of the Constitution of India does not militate against the applicability of the doctrine of promissory estoppel against the Government. The Apex Court has held as under:

The trial court and the High Court have rightly relied upon the decisions of this Court in the case of Union of India v. Anglo Afgan Agencies AIR 1968 SC 718 where it was held that the non-execution of the contract in terms of Article 299 of the Constitution of India does not militate against the applicability of the doctrine of promissory estoppel against the Government. We also find that a reference to some other decisions of this Court, namely, Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh and Others, and Delhi Cloth and General Mills Ltd. Vs. Union of India (UOI), has been rightly made for the proposition of liability of a party on backing out of a promise held out, after making the other party alter his position.

As will appear from the aforesaid decision of the Apex Court that the doctrine of promissory estoppel compels the defendant to pay the amount even in the absence of any written document. The officer was given by the defendant which has been duly accepted by the plaintiff as will appear from the admission of both the parties. Therefore, there is no reason to deprive the plaintiff from the payment of the work done by him.

In view of the aforesaid, no substantial question of law arises in the second appeal and the second appeal is liable to be dismissed with costs throughout.

The appellant is directed to pay the amount due to the plaintiff-respondent within a period of two months from the filing of the certified copy of the order.

Consequently, second appeal is dismissed with costs.