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1963 SCC OnLine Punj 74 : ILR (1963) 2 P&H 463 : AIR 1963
P&H 538

Appellate Civil
BEFORE D. FALSHAW, C.J., AND TEK CHAND, J.

Shiv Dayal Kapoor and others … Appellants.

Versus
Union of India and another … Respondents.
Regular First Appeal No. 13 of 1952,
Decided On : March 21, 1963

Contract Act (IX of 1872)—Privity of Contract—Meaning of—Rights and

obligations under a contract—Whether can be acquired by or imposed on a
third party not privy to the contract—Maxim volenti non fit injuria—When
can be pleaded in defence—Act of conversion—When committed—Relief
under tort of conversion not claimed in plaint—Whether can be granted.
Held :
That privity of contract means the relationship subsisting between two
contracting parties. “Privity” in this context implies a mutuality of will and is an
interaction of parties and their successors. It creats a legal bond or tie or a
vinculum juris. This rule of privity of contract is that no one but the parties to a
contract can be bound by it or entitled under it but it has certain exceptions. There
is deemed to be an artificial privity in the case of a trustee and beneficiary and also
principal and agent. The rule of Common Law in Englnad was expanded by
engrafting fictions in order to prevent the rigour of the law.
Held :
That when an obligation is founded upon a contract, the assent of a person to
be bound is at the root of the matter and is indespensable. As the third party is not
an assenting party he cannot be called upon to bear the burden of the contract nor
can any contractual obligations be imposed on him. It is the counter-part of the
principle that a third party cannot acquire a rights under a contract.
Held :
That the principle underlying the maxim volenti non fit injuria is that where a
damage is suffered by consent, it does not give rise to a cause of action or that a
man must bear loss arising out of the act to which he has assented. The defence on
the basis of this maxim is raised in cases of

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torts where a party consents to run the risk of accidental harm or in cases of
master and servant and of persons coming to dangerous premises.

Held :
That an act of conversion may be committed. (1) when property is wrongfully
taken, (2) when it is wrongfully parted with, (3) when it is wrongfully sold in market
ovent although not delivered, (4) when it is wrongfully retained and (5) when it is
wrongfully destroyed or changed in nature.
Held :
That the fact that the plaint does not mention that the plaintiffs are seeking relief
under the tort of conversion, is not sufficient to deprive the plaintiffs of the only
remedy available to them in the circumstances established when all the facts are
set out and the contesting defendant has not been prejudiced in any manner. The
appropriate relief will not be withheld where all the facts are stated in the plaint and
supported by evidence and the matter has been raised before and considered by
the trial Court. There is no element of surprise and on that account the contesting
defendant has not been prejudiced in any way.
Regular First Appeal from the decree of Shri Chander Gupt Suri, Sub-
Judge, 1st Class, Delhi; dated the 28th September, 1951, dismissing the
plaintiffs suit.
Gurbachan Singh, D.K. Kapur, R.L. Tandan And Venoo Bhagat,
Advocates, for the Appellants.
Jindra Lal and Daljit Singh, Advocates, for the Respondents.

JUDGMENT

TEK CHAND, J. — This is a plaintiffs' first appeal from the judgment and
decree of the Court of Subordinate Judge, Delhi, dismissing the
plaintiff's suit, but leaving the parties to bear their own costs. The
plaintiffs are seven in number, out of whom plaintiff No. 5 is a minor.
Plaintiffs Nos. 2 to 5 are sons of plaintiff No. 1. The first defendant is
the Union of India and the second defendant is Captain S. Kirpa Ram.
The

Page: 465

claim in the suit is for recovery of Rs. 72,266-13-0 and for the grant of
mandatory injunction or in the alternative for recovery of Rs. 1,47,730-
12-0.

The second defendant, who is a Government Contractor, has been

carrying on business under the name and style of R.S. Captain Kirpa
Ram and Sons. The Central Goevrnment had invited tenders for supply
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of door frames and window frames (Chaukat), etc., and shutters of hard
and soft wood. The second defendant submitted his tender in his
business name of Captain S. Kirpa Ram and Sons for C.P. Teak wood,
Deodar and Kail. In the month of February, 1948, the Government
made a new proposal to defendant No. 2 to make the entire supply in
teak wood if he would charge at the lowest rates which had been
tendered by different tenders. An agreement was thus brought about
and the agreement form was signed by defendant No. 2 on 27th of
July, 1948. On behalf of the Governor-General of India in Council, the
Chief Engineer signed the agreement on 18th December, 1948 (vide
Exhibit D.I.). Under this agreement the second defendant was to use
C.P. Teak wood but in February, 1949, the terms of the contract were
changed and defendant No. 2 was to execute the contract partly in Teak
wood and partly in Deoadar wood. The reason alleged for this change
was that there was considerable difficulty in procuring railway wagons
for transport of Teak wood from the Central Provinces. By this change
the quantity of Teak wood to be supplied was reduced to 5,58,000
square feet. To distinguish this contarct from other contarcts which
were held by the second defendant from the Central Public Works
Department, this contract was styled “Captain S. Kirpa Ram and Sons
(Woodwork)”. The entire supply was to be completed within ten
months. Clause 2 provided. “The time allowed for carrying out the work
as entered in the tender …… shall be

Page: 466

reckoned from the date on which the order to commence work is given
to the contractor.” Time was deemed to be an essence of the contract
on the part of the contractor.

Owing to financial difficulties, it is stated that the second defendant

could not finance the execution of work. Before the agreement was
signed on behalf of the Government, the second defendant approached
plaintiffs No. 1 to 4 with a request to finance the business to which
they agreed subject to certain terms. Plaintiffs 6 and 7 also agreed to
join. A formal agreement was drawn up on 30th of August, 1948, and it
was executed between plaintiffs Nos. 1 to 4 and plaintiffs Nos. 6 and 7
of the one part and the second defendant of the other (vide Exhibit P.
16). By its terms, plaintiffs Nos. 1 to 4 agreed to advance up to Rs.
2,00,000. The 5th plaintiff was admitted to the benefits of the
parthership. This agreement was modified by a later agreement dated
15th April, 1949, whereby the plaintiffs Nos. 1 to 4 agreed to contribute
Rs. 3,00,000. Defendant No. 2 was entitled to profits and was also
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liable to losses in the ratio 4 annas 3 pies in the rupee. The agreement
as modified was sent to the Central P.W.D., and its receipt was
acknowledged by letter dated 12th of May, 1949 (vide Exhibit P. 18). It
is said that the plaintiffs in order to carry out the contract erected a
factory at considerable expense on a site near Central Public Works
Department Warehouse, Factory Road, New Delhi, which had been
allotted by the Government. Considerable sum of money was spent on
the erection of the building and for connecting the premises with the
electric mains. The total cost for this construction as detailed in
Annexure ‘A’ attached with the plaint comes to Rs. 90,977-3-0.

It was alleged that the Government (defendant No. 1) was to procure

for the contractor (defendant

Page: 467

No. 2) 235 railway wagons for transporting from Central Provinces

1,25,000 cubic feet of Teak wood required for manufacturing 5,58,000
square feet of finished stores. The Government, however, failed to carry
out its obligations and priority permits were given for 125 railway
wagons only out of 235 wagons which were needed. Out of these only
58 wagons were secured and up to 15th of November, 1948. only 6
wagons had been provided. It was also alleged that electric connections
were procured after considerable delay. Despite the handicaps the
plaintiffs managed to manufacture 1,14,553 square feet of Chaukats,
shutters, etc., out of which 89,506 square feet of finished stores were
tendered to and accepted by the C.P.W.D., leaving 25,047 square feet
of finished stores lying with the plaintiffs ready for delivery. The details
of the quantity tendered and of the quantity left over are given in
Annexures ‘B’ and ‘C’, respectively.

The plaintiffs contend that the Government raised obstacles in the

execution of the contract by making deductions from the bills for stores
supplied. This was done in satisfaction of the claim on account of
alleged arrears of income-tax for the year 1942-1943 from defendant
No. 2. Deductions were also made on account of the amount claimed by
the Delhi Improvement Trust as rent of the site of the factory works at
Rs. 2,000 per mensem and also on account of security deposit.
According to the Government the previous security deposit of Rs.
50,000 had been appropriated towards the said arrears of income tax.
These deductions from the bills for May, 1949, aggregated to Rs.
31,856. The entire amount of bills for June was withheld. The plaintiffs
complained that these deductions crippled their finances and practically
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paralysed the production work.

On 16th August, 1949, Shri O.P. Mahindra, Executive Engineer-in-

charge, sent a letter to Messrs

Page: 468

R.S. Kirpa Ram and Sons stating that the date of commencement of the
work was 19th of April, 1948, and 10th months were allowed for
completion of the work. Only ten per cent of the work had been
completed and thereby clause 2 of the agreement was contravened and
the contractor had rendered himself liable to pay compensation. The
contract was rescinded under clause 3(a). He wrote “also I take
possession on 18th August, 1949, of all tools and plants materials and
stores in or upon the above work, or the site thereof belonging to you,
or procured by you and intended to be used for the execution of the
above work, under clause 4 of your agreement.” It was also said that
the work done up-to-date would be measured on 20th of August, 1949
(vide Exhibit P. 19). The threat was carried out and guards were posted
immediately at the site. The plaintiffs denied any default on the part of
defendant No. 2, the responsibility for the default, if any, was said to be
that of the Government. It was said that the Government had fixed
19th of April, 1948, as the date for commencement of the work most
arbitrarily as the contract itself came into existence on 18th of
December, 1948. No order to commence work had ever been given. The
electric connection was not given till 23rd of December, 1948. No
deductions on account of arrears due from defendant No. 2, as claimed
by the Government, could have been made as defendant No. 2 had no
disposing power over any portion of the amount of the bills. The assets
in the nature of the entire undertaking and tools, plant, materials and
stores could not be taken possession of as they were the property of the
plaintiffs and not of defendant No. 2. By these wrongful exactions the
work had been brought to a stand-still and the protests of the plaintiffs
against these deductions on the ground that “Captain Kirpa Ram and
Sons (wood work)” were an entirely different firm than Messrs Kirpa
Ram and Sons, of which Captain Kirpa Ram was the sole

Page: 469

proprietor, turned out to be unavailing. A telegram dated 26th of

August, 1949, of protest was sent to Executive Engineer, Chief
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Engineer, C.P.W.D., New Delhi, and also to Secretary, Works, Mines,

Power, Government of India (vide Exhibit P. 21). This was followed by a
detailed notice under section 80 of the Code of Civil Procedure, dated
the 30th of August, 1949. It is alleged that taking advantage of the fact
that the plaintiffs could not institute a suit before the expiration of the
statutory period of two months, the first defendant set up another
contractor Rai Bahadur Jodha Mal in respect of the Deodar wood-work
and started using the plaintiffs' machinery, plant, etc., and continued
to use it for some three months up to the end of November, 1949. This
was done contrary to law. The manufactured stores lying at the site
were removed. The value of logs, seasoned wood, manufactured
Chaukats and manufactured shutters, as detailed in Annexure ‘C’,
comes to Rs. 1,47,730-12-0. After the contract of defendant No. 2 had
been illegally put an end to, the plaintiffs were entitled to remove the
material, but they were prevented from doing so.

The suit has been valued for purposes of jurisdiction at Rs. 2,20,497-2-
0 and court fee on the amount has been paid. On the basis of the above
allegations the plaintiffs pray for a decree for Rs. 72,266-13-0 to be
passed in respect of the price of stores supplied and accepted (Rs.
50,686-13-0), in respect of claim for damages on account of salary of
staff (Rs. 3,780), use and consequent deterioration of tools, plant and
machinery (Rs. 9,500), and interest on capital amounting to Rs.
3,50,000 at 6 per cent from 18th August, 1949 to 10th January, 1950
(Rs. 8,300). It was also prayed that defendant No. 1 be ordered by a
mandatory injunction to deliver to the plaintiffs the stores and timber
which the C.P.W.D., had removed from the site of the plaintiffs' works
as detailed in Annexure ‘C’. In case

Page: 470

defendant No. 1 was unable to do so or in the event that the Court

could not grant mandatory injunction a sum of Rs. 1,47,730-12-0 was
claimed as compensation. Another relief by way of permanent
injunction directing defendant No. 1 to remove the guards, restraining
its servants from interfering with the plaintiffs' possession and
restraining defendant No. 1 or his servants or agents from removing the
casing or Teak wood waste lying at the site was also claimed.
Defendant No. 2 did not put in appearance despite having been duly
served. The above allegations were denied in the written statement by
defendant No. 1. A preliminary objection was also raised against the
maintainability of the suit against defendant No. 1 as there was no
privity of contract between the plaintiffs and defendant No. 1.
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On the merits it was maintained that the date of commencement of the

contract was 19th of April, 1948, and this was also admitted by the
contractor, defendant No. 2 in his letter dated the 3rd of December,
1948. The Government admitted having undertaken to arrange priority
permits for 235 railway wagons for transporting Teak wood. The
Government admitted that the factory was constructed and stores and
machinery brought there. The partnership deed between the plaintiffs
and defendant No. 2 was sent to the C.P.W.D., authorities but that was
not sufficient for creating contractual relationship between the plaintiffs
and the Government. The quantities of finished goods, alleged to have
been manufactured on the site as claimed by the plaintiffs, were not
denied, but the price of the finished goods as claimed by the plaintiffs
was not accepted. The Government maintained that the forfeiture of the
security deposit and payment of the amount together with 25 per cent
of the running bills to the income tax

Page: 471

authorities against income tax due from defendant No. 2 was in

accordance with law. These were in the nature of Crown debts and were
recoverable as arrears of land revenue. Recovery on account of rent for
the site of the factory payable to the Improvement Trust was validly
made. It was also claimed that the factory, machinery and other tools,
etc., lying on the works were lawfully seized under the agreement. The
contractor had failed to execute the contract within the stipulated time
of 10 months from the date of commencement of work which, according
to defendant No. 1, was 19th of April, 1948. It was stated that the
property seized had been measured and mentioned in inventories
prepared in the presence of the representatives of the contractor and it
was also said that necessary credit for the same would be given to
defendant No. 2. The trial Court framed the following issues:—

(1) Did the plaintiffs or any one of them finance the contract
obtained by defendant No. 2 and to what extent?

(2) Was the amount so advanced a charge on the assets and profits
of the business of defendant No. 2? Does it affect the rights of
defendant No. 1 under clause 4 of the contract?

(3) Was the order for commencement of work given by defendant

No. 1 before the contract was signed on behalf of the Governor-
General and when?
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(4) If so, could the said order be given before the date of the
contract was signed?

(5) Did not defendant No. 2 make himself liable to the forfeiture of
the entire amount of the security deposit?

Page: 472

(6) Did not defendant No. 2 commit default in carrying out the contract
entitling defendant No. 1 to take action under clause 4 of the contract.

(7) Had defendant No. 1 the right to appropriate any part of the
security deposit towards any dues not arising out of the
contract? What was that amount? If not; what is the effect?

(8) Had defendant No. 1 the right to deduct from the bills of
defendant No. 2 the amount of rent, if any, due from defendant
No. 2 to the Improvement Trust, If not, what is the effect?

(9) Was defendant No. 1 entitled to hand over the machinery,

plant, etc., to Jodha Mal Contractor for work not connected with
the contract in dispute?

(10) If the 9th issue goes against the defendant, to what

compensation, if any, are the plaintiffs entitled?

(11) What was the value of the stores at the time they were taken
over by defendant No. 1?

(12) What was the value of the machinery, plant, buildings, etc., at
the time it was taken over by defendant No. 1?

(13) Are the plaintiffs entitled to any compensation from defendant

No. 1 regarding the machinery, etc., and the stores taken over
by defendant No. 1?

(14) To what amount of damages, if any, are the plaintiffs entitled

from the defendant No. 1?

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According to the learned trial Court the real point in controversy was
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whether there was no privity of contract between the plaintiffs and

defendant No. 1 and issues 13 and 14 were deemed as covering this
part of the controversy. The trial Court did not accept the contention of
the plaintiffs that the basis of the suit was the law of torts for wrongful
conversion by defendant No. 1 of property belonging to the plaintiffs.
The suit was on the basis of breach of contract and in the absence of
any privity of contract the relief was not available to the plaintiffs
against the first defendant.

On the first issue it was found that the plaintiffs Nos. 1 to 4 had
invested a sum of Rs. 3,28,000 approximately in this business and the
contribution of plaintiffs Nos. 6 and 7 came to Rs. 45,000, the total
being Rs. 3,73,000. This finding has not been contested before us and
it is, therefore, unnecessary to refer to the evidence on the basis of
which this conclusion was arrived at. The second issue was decided
against the plaintiffs on the principal ground that the rights which had
been reserved under the agreement of partnership between the
plaintiffs and defendant No. 2 were not operative against the
Government, defendant No. 1. It may be mentioned that the
partnership agreement (Exhibit P. 17) was executed on 30th of August,
1948. Defendant No. 2 had already submitted his tender form duly
signed on 27th July, 1948. It is, however, true that on behalf of the
other contracting party, the Governor-General of India, the contract was
signed by the Chief Engineer on 18th of December, 1948. Plaintiff No. 6
as the attesting witness of the tender had set down his signatures on
the same day. The plaintiffs contention was that the partnership
agreement was prior in time to the agreement which could only be
deemed to have been completed on the date when the representative
of the

Page: 474

Government had signed it on 18th of December, 1948. The partnership

agreement, however, has referred to the agreement between the
Government and Kirpa Ram, the two defendants, as being complete
despite the fact that in the eye of law that was not so. The trial Court
was, however, of the view that the plaintiffs could not have reserved to
themselves better rights than those which had been given to the
contractor under his tender. According to the Subordinate Judge the
rights of the Government came before the claim of the plaintiffs under
the partnership agreement. It was also provided that the plaintiffs'
charge against defendant No. 2 would only become operative on the
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balance left after meeting all the liabilities which included liability to
the Government. The plaintiffs' priority in the matter of payment from
the amounts due to the contractor came into existence when the
amounts became payable, but that conferred on rights upon the
plaintiffs as against the first defendant. Such rights as the Government
had under its contract with defendant No. 2 remained unaffected.

I may at this stage refer to clause 4 of the conditions of the contract

between the two defendants, as they have been the subject-matter of
adverse comments from the side of the plaintiffs. Under this clause the
Divisional Officer after rescinding the contract and measuring up the
work of the contractor as contemplated in the preceding clause could, if
he so desired, “take possession of all or any tools, plant, material and
stores in or upon the works, or the site thereof or belonging to the
contractor, or procured by him and intended to be used for the
execution of the work or any part thereof paying or allowing for the
same any amount at the contract rates, or, in case of these not being
applicable, at current market rates to be certified by the Divisional
Officer whose certificate thereof shall be final ……” This clause also

Page: 475

empowers the Divisional Officer to sell by auction or private sale on

account of the contractor and at his risk such tools, plant, material or
stores taken possession of from the premises. Under this provision
extensive powers of seizure have been given to the Divisional Officer
and they are not confined to the tools, plant, material and stores, etc.,
belonging to the contractor, but to all such things which are upon the
works or on the site even if they are the property of a third party. One
of the principal grounds convassed in this case is that the property,
which had been taken possession of by the Government, belonged to
the plaintiffs and not to defendant No. 2 and had been brought there by
the plaintiffs and as such was not liable to seizure in accordance with
the terms of the contract as between the two defendants by reason of
the fact that the plaintiffs were no party to that contract.

On the third and fourth issues the trial Court expressed the view that
the seizure was contrary to the terms of the contract. Clause 2 of the
conditions of contract (Exhibit D. 1) provides that the time allowed for
carrying out the work, which was ten months, “shall be reckoned from
the date on which the order to commence work is given to the
contractor”. The contract was to be carried out with due diligence, time
being the essence of the contraction the part of the contractor, and in
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the event of delay the contractor was liable to pay compensation.

According to the construction placed upon this clause by the trial Court
a date for the commencement of the work was to be fixed and was to
be intimated to the contractor so that he should know that the time had
started running. As a matter of fact, there is no indication that a date
for commencement of the work had been fixed or communicated to the
contractor. On the 4th of March, 1949, the contractor wrote to the
Executive

Page: 476

Engineer requesting him to confirm that the date of commencement

was 15th of January, 1949 (Vide Exhibit D. 4). The Executive Engineer
wrote back on 18th of March, 1949 (Exhibit D. 5) saying that the date
of commencement was under consideration and would be confirmed
shortly. A copy of this communication was sent to the Superintending
Engineer with a request that he should decide the point at a very early
date to enable his office to regularise the contract. It was also said that
the contractor was pressing for running payment which had been held
up pending the decision of this question. The Executive Engineer, Shri
O.P. Mohindra appeared as D.W. 1 and said that up to 18th of March,
1949, the date of commencement of work had not been decided upon
and had not been intimated to the contractor. From this, the trial Court
rightly concluded that there was nothing from which the contractor
could know that the term of ten months stipulated under the contract
had started running. The Superintending Engineer in his letter dated
the 5th of April, 1949 (Exhibit D.W. 1/6) addressed to the Executive
Engineer said that the contractor had admitted himself in his letter
dated 3rd of December, 1948, that the above work was awarded to him
in April, 1948, and this letter was enough. He then proceded on to say:
—

“The date of commencement of the work can be fixed now on the

authority of this letter, after allowing a week's time as
preparation period, i.e., 19th April, 1948, should be considered
as date of commencement of the work.”

Below this letter there is an endorsement to Messrs Kirpa Ram and

Sons for information, wherein it is also stated that the date of
commencement of the above work would be reckoned from 19th April,
1948.
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Page: 477

As the period of completion is shown as 10 months in the agreement it

transpires that the contractor had failed to complete the work within
the time limit and had made himself liable for penalty unless extension
is granted to him for which he should apply forthwith to enable the
office to regularise the issue.

The letter of the contractor, to which reference was made by the

Superintending Engineer in Exhibit D.W. 1/6, is dated 3rd December,
1948 (Exhibit D. 2). Paragraph 3 of that letter runs as under:—

“In April, 1948, the Government of India awarded the whole work
to us,—vide your letter No. CE/WS/253-Const., dated the 12th
April, 1948, on the basis of the lowest tender rates.”

The above lines contained no admission of the contractor and the

Superintending Engineer was not, therefore, justified in arbitrarily
communicating the date of commencement as 19th of April, 1948. This
communication was made for the first time almost a year later on 5th of
April, 1949. Instead of giving him 10 months prospectively after
communicating the date of commencement he was informed under the
endorsement that the period of completion had already expired. In
other words, the communication of the date of commencement of the
work was made when the period of 10 months had already expired. This
is extremely arbitrary and irregular. I agree with the trial Court that the
contractor had not violated the terms of contract which would justify
the invocation of caluse 2 of the conditions of the contract. The trial
Court also found that there was reliable documentary evidence to show
that neither the railway wagons nor the electric connection could be
arranged during the whole of the year 1948. During that year less than
half a dozen wagons had been

Page: 478

available to the contractor out of a total number of 235 wagons which

according to the defendant the contractor required. The power
connections were given as late as 21st of December, 1948, and 11th of
January, 1949. In these circumstances, it is inconceivable how the
C.P.W.D., arbitrarily fixed 19th of April, 1948, as the date of
commencement of work. On the merits the Subordinate Judge came to
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the conclusion that the contract had been illegally rescinded and that
the contractor was given no chance to complete the contract and the
promised facilities had failed. I find myself in complete agreement with
this finding. I, however, am not persuaded to hold, as was held by the
trial Court, that the plaintiffs, being no parties to the contract, cannot
object to any improper performance or breach of any of the terms of the
contract. This matter will be considered presently.

On the 5th issue it was held on the merits that nothing done by
defendant No. 2 had made himself liable to the forfeiture of the entire
amount of security deposit. In this case a sum of Rs. 50,000 had been
deposited by the contractor under the contarct. This amount had been
forfeited. In order to justify such a forfeiture it was imperative that
there should have been a date of commencement of work duly
communicated to the contractor and it should have been proved that he
was responsible for delay in performing his part of the work. Further, if
he had defaulted the Superintending Engineer should have determined
the compensation payable in accordance with clause 3 of the conditions
of contract. If the compensation so determined had exceeded the
amount of the security deposit action under (a) and (c) of clause 3
could have been taken. Thus forfeiture has taken place for which there
is not even the remotest justification. The only ground on which the
decision is given against the plaintiffs is that not being a party

Page: 479

to the contract it is not for them to agitate this matter. Again on issue
No. 6 it has been found that the contractor, defendant No. 2, did not
fail to execute the work within the time allowed under the contract
Though no default had been committed and the breach had been on the
side of the Government, the plaintiffs have been denied relief on the
ground that they were strangers to the contract and, therefore, could
not get the matter referred to arbitration. No finding on the merits was
given on issues Nos. 7 and 8 for the same ground that the plaintiffs
were outsiders. On the 9th issue also the trial Court held that the
matter could be agitated at the instance of the contarctor only. It was
admitted that the machinery had been made over to the other
contractors including Rai Bahadur Jodha Mal for the execution not only
of this but also of other contracts. The compensation for wrongful user
and seizure, according to the trial Court, is payable to the contractor
only if the matter had been taken up by him. On the 10th issue it has
been held that the plaintiff cannot agitate the quantum of
compensation. On the 11th issue the trial Court found that the value of
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extra items taken over by the Government was approximately Rs.

94,000. The value of the property according to the plaintiffs was Rs.
1,47,000. The quantities mentioned in Annexures ‘B’ and ‘C’ to the
plaint have not been questioned by the Government. They are not
agreed as to the rates of different items. The plaintiffs contended that
the Teak wood logs should have been valued at Rs. 7 per cubic feet
whereas the C.P.W.D., authorities have given credit to the contractor at
the rate of Rs. 3-8-0 per cubic feet. Without calling into question the
testimony of P.Ws. 6, 10 and 11 regarding the rates of these items the
trial Court in view of clause 4 has said that the contractor is to be
allowed payment for the goods taken possession of at current market
rates to be certified by the Divisional Officer whose certificate

Page: 480

thereof would be final. In other words, if the current market rate is Rs.
7 but the Divisional Officer has certified it to be at half the amount the
contractor cannot then claim at the current market rate. On this
interpretation of clause 4 the trial Court came to the conclusion that the
value of extra items taken over by the Government at the time of the
seizure was about Rs. 94,000 and not Rs. 1,47,000 as claimed by the
plaintiffs. The 12th issue is as to the value of the machinery, plant,
building, etc., at the time they were taken over by defendant No. 1. In
the absence of rebuttal on the part of the first defendant the value as
assessed by the plaintiffs has been accepted, that is, Rs. 90,977-3-0 as
detailed in Annexure ‘A’ to the plaint. The last two issues have been
decided against the plaintiffs for the reason that there is absence of
privity of contract. Lastly, finding that it has been a very hard case for
the plaintiffs the parties have been left to bear their own costs. It will
thus appear that the main ground on which the plaintiffs' suit has been
dismissed is one of competence in the plaintiffs as they were strangers
to the contract. They have been denied relief as according to the trial
Court it was based upon infringement of the terms of the contract to
which they were no parties. Their right to relief on the ground of
tortious conversion has been denied as the form of the suit, according
to the trial Court, did not indicate that they could avail themselves of
the remedy in torts. These matters may now be examined. There is no
grainsaying the fact that the contract (Exhibit D. 1) which was signed
by the tenderer on 27th July, 1948, and by the representative of the
Governor-General in Council on 18th December, 1948, had created
contractual relationship as between the two defendants and the
plaintiffs were strangers to the contract. That being so, the plaintiffs
could not apart from certain well-known exceptions—claim any benefit
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or suffer any liability under

Page: 481

the contract. Both sides before us have argued their respective cases on
the basis that there is no privity between them.

It has further to be made clear that according to the terms of the

partnership entered into between the plaintiffs and defendant No. 2 on
30th of August, 1948, the entire undertaking was of the plaintiffs
without any contribution whatsoever from defendant No. 2 and his
interest was confined to profit of 4 annas 3 pies in the rupee. The terms
of this partnership had been communicated to the C.P.W.D., authorities
and they are presumed to be aware of its terms and no objection
whatever was raised on the ground that the contract was being
assigned or that the work was being sublet. Clause 21 of the conditions
of contract provides that the contract shall not be assigned or sublet
without the written approval of the Divisional Officer. It was open to the
Divisional Officer to rescined the contract after giving notice in writing
but the contract had not been rescinded on that ground. The
investment in the undertaking is entirely of the plaintiffs which
amounts to Rs. 3,73,000 as found by the trial Court while deciding the
first issue. This finding has not been questioned before us. The result
has been that though no breach of the contract had taken place and
though no undertakings given by defendant No. 2 had been violated,
not only the contract was illegally rescinded but the deposits have been
forfeited, the entire plant, tools, materials and stores have been seized,
the factory has been made over to other contractors not only to execute
the contract in question but also the other contracts. Deductions have
been made from the bills and the security deposit has been given over
to the income tax authorities for meeting the previous income tax
liabilities for the year 1942-43 (amounting to Rs. 17,00,000) of
defendant No. 2. The income-tax claimed had no

Page: 482

connection whatsoever with this contract. In other words, though no

term of the contract had been infringed by defendant No. 2 and despite
the knowledge that the entire undertaking and its assets had been
contributed by the plaintiffs the same have been forfeited. The
argument on behalf of the Government virtually comes to this : Though
we know that the entire undertaking had been financed by the plaintiffs
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and we did not exercise our power under clause 21 to rescind the
contract on the ground of assignment or subletting, though we seized
the goods, machinery, plant, etc., which was the exclusive property of
the plaintiffs despite there having been no infraction of the conditions
of the contract, though we diverted the security deposit to meet the
income-tax liability of Kirpa Ram which had not arisen under this
contract, though the seizure was of plaintiffs' property who were under
no obligation to us, nevertheless we refused reparation to the plaintiffs
as they were strangers to the contract we had infringed. There can be
no two opinions on a gross unfairness of such an extent. The question
to be considered is whether the sanction of the law can be invoked for
perpetrating the illegalities when neither defendant No. 2 as a
contracting party nor the plaintiffs, whose monies, goods and factory
were taken possession, had acted in contravention of any term of the
contract. Another contention which was advanced on behalf of the
Government was that though the property taken possession of was of
the plaintiffs and the seizure was wrongful, remedy was available to
Kirpa Ram alone and it was not open to the plaintiffs to contend that
the terms of the contract had been violated. It was also urged that the
plaintiffs were consenting party to the contract and, therefore, they
were in no better position than Kirpa Ram. It was said that the rule of
Volenti non fit injuria was an effective answer to the plaintiffs' claim.

Page: 483

I may now consider the implications of the rule underlying the doctrine
of privity of contract, which means the relationship subsisting between
two contracting parties. “Privity” in this context implies a mutuality of
will and is an interaction of parties and their successors. It creates a
legal bond or tie or a vinculum juris. The rule of privity of contract is
that no one but the parties to a contract can be bound by it or entitled
under it. In the words of Pollock—

“A third person cannot become entitled by the contract itself to

demand the performance of any duty under the contract.”

Salmond and Winfield put in thus:—

“No man can enforce a contract to which he is not a party, even

though he has direct interest in the performance of it.”

The doctrine of ‘privity of contract’, as above stated is well settled in

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England, but it has certain exceptions. There is deemed to be an

artificial privity in the case of a trustee and beneficiary and also
principal and agent. The rule of common law was expanded by
engrafting fictions in order to prevent the rigour of the law. The leading
case on the subject is Tweddle v. Atkinson (1), settling the rule that the
third person cannot sue on a contract made by the contracting parties
(2)
for his benefit and confirmed the rule in In price v. Easton , that a
contract cannot confer rights on strangers. Lord Haldane in Durilop
(3)
Pneumatic Tyre Co., Ltd. v. Selfridge and Co., Ltd., , stated the
principle thus:—

“In the law of England certain principles are fundamental. One is

that only a person

Page: 484

who is a party to a contract can sue on it. Our law knows nothing of a
jus quaesitum tertio arising by way of contract. Such a right may be
conferred by way of property, as for example, under a trust, but it
cannot be conferred on a stranger to a contract as a right to enforce the
contract in personam.”

By the term jus quaesitum tertio is meant the right of a third person to
enforce a contract to which he is not a party. The peculiarity of Scots
law is that when a contract shows that the object of the parties to it
was to advance the interests of a tertius, and the tertius is named, then
a jus quaesitum tertio which attached a right of the third party to
enforce a contract is created giving the tertius a title to sue. (Vide the
Dictionary of England Law by Earl Jowitt, page 1936). Lord Haldane in
the above passage was probably contrasting the English law from the
other system. In a considered judgment of a Bench of Calcutta High
(4)
Court in Khirod Behari Dutt v. Man Gobinda and others , Lort-
Williams, J., after reviewing the English and the Indian decisions,
expressed the view that though ordinarily only a person who is a party
to the contract can sue on it, where a contract is made for the benefit of
a third person, there may be an equity in the third person to sue upon
the contract. Reference may also be made to Adhar Chandra Mondal v.
(5)
Dolgobinda Das , Babu Ram Budhu Mal and others v. Dhan Singh
(6)
Bishan Singh and others , Abdul Ghafur Butt v. Mohammad Salim
(7)
and others , and A.R. Iswaram Pillai v. Sennivaveru Taragan and
(8)
three others .
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Page: 485

This is, however, not a case in which the plaintiffs as strangers are
claiming benefits of the contract. The plaintiffs' contention is that in a
contract between the Government and Captain S. Kirpa Ram the
contracting parties cannot impose a liability on the plaintiffs who are
strangers to the contract. Their contention is that Captain S. Kirpa Ram
by agreeing to clause 4 of the conditions of the contract, whereby it
was open to the Divisional Officer to take possession of all tools, plant,
materials and stores in or upon the works or the site not only belonging
to the contractor but also procured by him and intended to be used for
the execution of the work, could not impose a liability upon the
plaintiffs or any other stranger and thereby put in jeopardy their
property. The plaintiffs contend that on the strength of the terms of the
contract the Government could not claim a right to seize the goods of
the plaintiffs. In other words, in a suit by the plaintiffs the defence
under clause 4 of the terms and conditions of the contract is not open
to the Government. Cheshire and Fifoot in the Law of Contract, Fifth
Edtion, page 378, have put the matter thus:—

“The doctrine of privity, while in principle at least it prevents a third

party beneficiary from suing on a contract, operates with equal
logic to forbid the contracting parties to enforce obligations
against a stranger. It has long been an axiom of the common
law that a contract between A. and B. cannot impose a liability
upon C.”

Pollock in his book on Contracts puts it thus:—

“A contract cannot be annexed to goods so as to follow the property

in the goods either at common law or in equity”. (Vide 13th
edition at page 187).

Page: 486

At page 162 the matter was put thus:—

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“It is obvious on principle that it is not competent to contracting

parties to impose liabilities on other persons without their
consent.”

The principle that when an obligation is founded upon a contract the

assent of a person to be bound is at the root of the matter and is
indispensable, as the third party is not an assenting party he cannot be
called upon to bear the burden of the contract. It is thus open to the
plaintiffs to say to the Government that under contract with Captain S.
Kirpa Ram you could have taken the materials, stores, etc., brought by
him on the site but it is not open as a defence to the plaintiffs' claim
with respect to their assets as not being contracting parties they had
not incurred that obligation. According to Ansen, “it is a trial principle
of law that a person cannot be subjected to the burden of a contract to
which he is not a party.” (Vide Anson's Law of Contract, 21st edition,
page 161). The principle is firmly established that contractual liabilities
cannot be imposed upon a party who is not a privy to the contract. It is
the counter-part of the principle that a third party cannot acquire rights
under a contract. We have not been referred to any principle or
precedent oh the strength of which the Government can set up in
defence to the plaintiffs' claim the conditions of contract to which
Captain S. Kirpa Ram alone was a party.

The learned counsel for the Government has relied upon the principle
underlying the maxim volenti non fit injuria. He has contended that the
partnership entered into between the plaintiffs and Captain S. Kirpa
Ram was with a view to exploit the undertaking covered by the contract
between him and the Government. The contract had not been

Page: 487

signed on behalf of the Government till 18th December, 1948, and the
partnership has been effected on the 30th of August, 1948. It was,
however, assumed in the partnership that the contract, which had been
signed by Captain S. Kirpa Ram, was a good contract and the work had
been commenced in pursuance of the same. The contention before us is
that the plaintiffs who were aware of the contract are deemed to have
knowledge of the terms “owners” and otherwise contained therein and
when they entered into the partnership they are deemed to have
assented to the liabilities which Captain S. Kirpa Ram had undertaken
to incur. The principle underlying the maxim is that where a damage is
suffered by consent it does not give rise to a cause of action or that a
man must bear loss arising out of the act to which he has assented.
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Assuming that the plaintiffs had knowledge of clause 4 of the terms

and conditions of the contract (Exhibit D. 1) that would not mean that
they consented to the imposition of the liability relating to seizure of
any goods brought there by them. There is a sharp distinction between
knowledge and scienti which does not necessarily imply consent.
(9)
Bowen, L. J., in Thomas v. Quartermaine , said:—

“The maxim, be it observed, is not ‘scienti non fit injuria’ but

‘volenti’. It is plain that mere knowledge may not be a
conclusive defence. There may be a perception of the existence
of the danger without comprehension of the risk ……”.

The defence of volenti non fit injuria is raised in cases of torts where a
party consents to run the risk of accidental harm or in cases of master
and servant and of persons coming to dangerous premises. No case has
been cited at the bar and I am aware of none where

Page: 488

doctrine has been applied to a case where the facts and circumstances
are analogous.

It was then urged that it was a suit on the basis of breach of contract
and the plaintiffs not being privy to the contract could not claim any
relief. The plaintiffs' contention is that they are not resting their claim
to damages on the consequence of a breach of contract but they have
an independent right to recover compensation for the wrongful actions
of conversion on the part of the Government.

An act of conversion may be committed, (1) when property is

wrongfully taken, (2) when it is wrongfully parted with, (3) when it is
wrongfully sold in market overt although not delivered, (4) when it is
wrongfully retained and (5) when it is wrongfully destroyed or changed
in nature. (Vide Clerk and Lindsell on Torts, 11th edition, page 422). It
cannot be seriously disputed that the acts complained of by the
plaintiffs against the Government do not amount to acts of conversion.
If the taking on the part of the Government was in breach of contract
with Captain S. Kirpa Ram it is undoubtedly wrongful. If the property
so taken was that of the plaintiffs the act of the Government
complained of does not cease to be wrongful simply because Captain S.
Kirpa Ram did not complain of a tort of conversion in respect of goods
and other property brought on the site, but in which he had no
proprietory interest. In my view it is open to the plaintiffs to contend
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that their property has been wrongfully converted to their detriment by

the Government. They can further say that the act of the Government
in the exercise of colourable right under contract with Captain S. Kirpa
Ram was illegal even qua Captain S. Kirpa Ram and not sanctioned by
the terms of the contract. In Exhibit P. 19, letter addressed by the
Executive Engineer to Messrs R.S. Kirpa Ram and Sons, dated 16th of
August, 1949, it

Page: 489

was said that the date of commencement of work was 19th of April,
1948, and ten months were allowed for completion of the work and by
failing to comply with clause 2 of the agreement the contracting party
had rendered iteslf liable to pay compensation. In this letter he also
referred to taking possession on 18th August, 1949, of all tools, plant,
materials and stores in or upon the above work or the site. The trial
Court had rightly found that there was nothing to show that any such
date for the commencement of the work had been fixed and much less
communicated to the contractor before the term under the contract had
started running against him. The contractor had written to the
Executive Engineer to confirm the date of commencement of the work
was 15th of January, 1949. (Vide Exhibit D. 4). The Executive Engineer
wrote back in reply on 18th March, 1949, saying that the issue
regarding the date of commencement of the work was still under
consideration and would be confirmed shortly. (Vide Exhibit D. 5). He
had endorsed this letter to the Superintending Engineer requesting him
to decide the point at an early date. As D. W. 1 the Executive Engineer
had admitted that the date of commencement had not been decided
upon and had not been intimated to the contractor up to 18th March,
1949. The contractor had no material for knowing when the period of
ten months stipulated under he contract started running. A so-called
date of commencement of the work was arbitrarily fixed as 19th April,
1948, by the Superintending Engineer (Vide Exhibit D.W. 1/6), but for
this there is no basis. The rescission of the contract and in pursuance
thereof the seizure of the goods, etc., was in breach of the terms of the
contract. In this case the seizure being of the property of the plaintiffs,
Captain S. Kirpa Ram took up an attitude of unconcern as he did not
stand to lose anything having no stake at all. The result thus is that the
Government could hot justify its various acts of

Page: 490
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seizure, conversion, etc., complained of by the plaintiffs as having been

done in exercise of the rights conferred by the contract. The property
brought on the site, whether at the instance of Captain S. Kirpa Ram or
in consequence of the volition of the plaintiffs, was not liable to being
taken possession of. In this case the acts complained of are wrongs
done not only to the contractor but also to the plaintiffs and the latter
are not without a remedy.

It is urged that the suit is not in proper form and the tort of conversion
does not form its basis. It is true that the plaint does not mention that
the plaintiffs are seeking relief under the tort of conversion but that
would be no ground for depriving the plaintiffs of the only remedy
available to them in the circumstances established when all the facts
are set out and the first defendant has not been prejudiced in any
manner. The contention was raised before the trial Court, though
unsuccessfully, that the basis of the suit was a tort of wrongful
conversion by defendant No. 1 of the property belonging to the
plaintiffs. It is possible that it might not have been clear to the mind of
the person drafting the plaint that the relief was specifically sought on
the ground of the tort of conversion and I would not withhold the
appropriate relief where all the facts are stated in the plaint and
supported by evidence and the matter has been raised before and
considered by the trial Court. There is no element of surprise and on
that account the first defendant has not been prejudiced in any way. On
the proved facts on the record the tort of conversion has been
committed against the plaintiffs and the fact that the plaintiffs are no
privy to the contract would not disentitle them from recovering
damages for the wrongful act of conversion. The plaintiffs are entitled
to relief not only on the ground of breach of contract to which they were
not parties but for the

Page: 491

reason that while seemingly enforcing the contract the Government

wrongfully took possession of the monies and property which belonged
to the plaintiffs. In this case, even if the monies and property belonged
to the contractor these could not be seized under the contract as
Captain S. Kirpa Ram had not violated any of its provisions. The date
for commencement of the work under clause 2 could not be fixed by
either party and the time under clause 2 was required to be reckoned
from the date when order to commence work was given and in this case
no such order had been given. The rescission of the contract was
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wrongful and the stores and other property had been seized illegally.
The illegality committed was vis a vis Captain S. Kirpa and a fortiori
against the plaintiffs who had violated no right of the Government and
had incurred no liability or obligation under any legal duty which they
might be said to be owing to the Government.

In view of the above findings, the next question is the relief to which
the plaintiffs are entitled. According to paragraph 31 of the plaint the
first prayer is for the passing of a decree for Rs. 72,266-13-0 consisting
of two items of Rs. 50,686-13-0 and Rs. 21,580. The figure of Rs.
50,686-13-0 has been arrived at in the following manner. The total
quantity of manufactured stores as tendered by the plaintiffs to the
Central Public Works Department and accepted by the latter are of the
value of Rs. 1,17,830-9-0. The details are given in Annexure ‘B’ the
correctness of which has not been questioned. The plaintiffs were paid
by the Government various sums aggregating to Rs. 43,409 leaving a
balance of Rs. 74,421-9-0. After deducting a sum of Rs. 23,734-12-0
which has been withheld by the Central Public Works Department with
the plaintiffs' consent for payment to the plaintiffs' staff and labour, the
net amount remaining unpaid to the plaintiffs on account of stores
supplied and

Page: 492

accepted thus comes to Rs. 50,686-13-0. This sum is undoubtedly due

to the plaintiffs, and is allowed.

The other claim of Rs. 21,580 consists of three items, the details of
which are given in paragraph 25 of the plaint. Rs. 3,780 is being
claimed on account of salary of staff which had to remain idle. There is
no sufficient proof led on the record and this amount cannot
legitimately be claimed. P.W. 14 Ram Kishan, Secretary and Accountant
of Captain S. Kirpa Ram and Sons (woodworks) did state that their staff
remained idle for about four months after the Government took over
possession of the factory and that a loss of Rs. 3,700 had been
incurred. No registers have been produced and there is no sufficient
material on this record in support of the contention of the plaintiffs. The
next amount of Rs. 9,500 claimed on account of use and consequence
deterioration from 18th of August, 1949 to 10th of January, 1950, on
the part of the Central Public Works Department and their contractor
Rai Bahadur Jodha Mal in respect of the tools, plant and machinery, etc.
The claim appears to be exaggerated. It does appear that the factory
was given to another contractor and charge was made at the rate of Rs.
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30 per day per saw. The saw was used for a period of 4 months and 3
weeks beginning from 18th of August, 1949, till the date of the suit,
that is 10th of January, 1950. On this basis the total comes to Rs.
4,200 to which the plaintiffs should be entitled. The next item is of Rs.
8,300 which is being claimed as interest on capital amounting to Rs.
3,50,000 invested and blocked up at 6 per cent from 18th of August,
1949 to 14th of January, 1950. The trial Court has found that the
plaintiffs Nos. 1 to 4 had invested a sum of about Rs. 3,28,000 and
plaintiffs Nos. 6 and 7 had invested another sum of about Rs. 45,000.
The total investment comes to Rs. 3,73,000, but in the plaint interest is
being claimed

Page: 493

on an investment of Rs. 3,50,000. The claim of Rs. 8,300, therefore,

stands proved and the plaintiffs are entitled to it. The result, therefore,
is that out of the three amounts comprising Rs. 21,580, the plaintiffs
are entitled to two amounts of Rs. 4,200 and Rs. 8,300 only, making a
total of Rs. 12,500. Out of a total claim of Rs. 72,266-13-0 as claimed
in paragraph 31 (a) of the plaint the plaintiffs should be entitled to a
decree for Rs. 63,186-13-0, but in view of the discussion which follows
the sum of Rs. 4,200 has to be excluded out of this item.

Under paragraph 31(b) the plaintiffs have claimed a sum of Rs.

1,47,730-12-0. This is in respect of the stores and timber which the
Central Public Works Department removed from the site of the
plaintiffs' work as detailed in Annexure ‘C’ attached with the petition.
The plaintiffs in their plaint have asked for the issuance of a mandatory
injunction for the delivery of the above stores and timber and in the
alternative have asked that in case defendant No. 1 was unable to
return the stores, etc., then he should be ordered to pay compensation
in the sum of Rs. 1,47,730-12-0.

According to the finding of the Court on issue No. 11, the value under
this head has been assessed at Rs. 94,000. The trial Court has
observed that it is admitted that the parties are ad idem about the
quantities that have been taken over and the only difference is
regarding rates of different items. The item of Teak wood logs No. 11 in
the statement Exhibit P.W. 35 A is alone responsible for a difference of
about Rs. 25,000 because according to the plaintiffs the value of Teak
wood logs was Rs. 7 per cubic foot whereas the Central Public Works
Department authorities have given credit to the contractor at the rate of
Rs. 3-8-0 per cubic foot. According to the statement of P.W. 6, Gian
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Chand, P.W. 10, Sardar Singh,

Page: 494

and P.W. 11 Jawala Parshad Rs. 7 per cubic foot was the minimum
prevailing rate. The trial Court has not disbelieved their testimony, but
reduced the rate to Rs. 3-8-0 per cubic foot on the ground that under
clause 4 of Exhibit D. 1, it is provided that the market rates certified by
the Divisional Officer shall be final. The reasoning of the trial Court
cannot prevail for the simple reason that there is no privity of contract
between the plaintiffs and respondent No. 1 and the plaintiffs are not
bound by the terms of Exhibit D. 1. I may, however, mention that in
Exhibit P.W. 3/5, which is a letter by Shri O.P. Mohindra, Executive
Engineer, Construction Division No. 1, to the Superintending Engineer,
Central Circle, Central Public Works Department, New Delhi, dated 21st
of October, 1950, it is stated that the rates have been provided
according to the market value on the date of taking possession of the
materials less the recovery shown for demolishing at the end of the
statement. The statement refer red to is Exhibit P. W. 3/5A. Under the
6th column of that statement it is indicated that the rate against each
item has been arrived at by working out on the market rates. Shri O.P.
Mohindra has also appeared as D.W. 1 where he stated that the price of
the articles taken over by the Government was assessed by him and
was forwarded to the Government of India and has referred to the
estimate of the valuation Exhibit P.W. 3/5A. This evidence does not
give any indication as to what the prevailing market rate was at the
time and how it has been determined. I would in the circumstances
accept the testimony of P.W.s 6, 10 and 11 which has not been rejected
by the trial Court and hold that the prevailing market rate of Teak wood
was Rs. 7 per cubic foot. I would, therefore, allow to the plaintiffs
compensation in the sum of Rs. 1,47,730-12-0 as claimed by them.

In paragraph 311(c) the petitioner has prayed for the grant of

permanent injunction directing defendant

Page: 495

No. 1 to remove the guards, the Central Public Works Department have
posted at the site of the plaintiffs' work; restraining defendant No. 1,
their servants, or agents from interfering with the possession of the
plaintiffs and to allow them to remain in undisturbed possession of the
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plaint, machinery, etc., restraining defendant No. 1, their servants, or

agents from removing the casing or Teak wood waste lying at the site
near C.P.W.D. warehouse, Factory Road, New Delhi, or tools, etc., lying
or from using the tools, machinery, and plant, etc. It is also prayed in
the alternative that if the above relief by way of permanent injunction
cannot be given, such other relief might be granted as the Court may
deem fit to grant. The learned counsel for the plaintiffs concedes that
the relief under the above head has become infructuous because the
plaint was presented on 17th of January, 1950, and defendant No. 1,
through other contractors, had been in possession of the site and has
been working the machinery installed there for over 12 years. I do not
think that, in the circumstances, relief by way of permanent injunction
is suitable or will serve any purpose. This relief is refused, but the
question is whether the plaintiffs, by way of substitution, can be
granted relief by way of damages. It is true that they have not asked
for it, but in the circumstances of this case, there is no bar to the Court
allowing this, particularly when the matter has been put in issue No. 12
and a finding has been given by the trial Court. According to Annexure
‘A’ filed with the plaint the total expenditure incurred on machinery,
which includes cost of machinery, tools, parts, etc., cost of stores
applied on machinery, railway freight on machinery, cartage on
machinery, repairs and replacement, etc., of Bandsaw machines, and
terminal tax comes to Rs. 25,916-4-6. The expenditure incurred on
erection of the factory comes to Rs. 65,060-14-6. The total of the two
sums being Rs. 90,977-3-0. The Court

Page: 496

below has found that this total is supported by the account books of the
plaintiffs and by vouchers and cash memos. The figure has not been
disputed and no evidence in rebuttal has been led. The trial Court has
rightly taken the value of the machinery, plant, building, etc., as stated
in Annexure ‘A’ to the plant as correct. It was laid down by a Division
Bench in Amir v. Malik Khan Chand (10), that although declaratory
decrees are asked for, the plaintiffs can be given decrees for possession
of the land if they pay the Court fees required for possessory suits. In
(11)
Mehar Chand v. Milkhi Ram and others , the Full Bench expressed
the view that the pleadings of the parties should not be too strictly
construed and that it was the duty of the Courts to mould the relief to
be granted to the plaintiff according to the facts proved which,
however, should not be inconsistent with his pleadings.

(12)
In Dhani Sahu and others v. Bishan Prasad Singh and others , Fazl
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Ali, J., sitting in Division Bench, expressed the view that a plaintiff
ought to be given such relief as he is entitled to get on the facts
established upon the evidence in the case even if the plaint does not
contain a specific prayer for that relief. I, therefore, allow to the
plaintiffs as damages a sum of Rs. 90,977-3-0 under this head, but the
plaintiffs will not be entitled to execute the decree under this head
without paying court fee on the amount of Rs. 90,977-3-0. As the
plaintiffs are being allowed a decree for damages for Rs. 90,977-3-0
they cannot claim along with it the sum of Rs. 4,200 on account of use
of the factory at the rate of Rs. 30 per day per saw when it was given
by respondent No. 1 for use for a period of four months three weeks
from 18th of

Page: 497

August, 1949, the date of taking over, till the date of the suit, 10th of
January, 1950. The plaintiffs cannot simultaneously have relief by way
of damages and also compensation for use and occupation for a
particular period. The result, therefore, is that the plaintiffs suit is
decreed for Rs. 2,97,694-12-0 with proportionate costs.

D. Falshaw, C.J.—I agree.

———
(1)
(1861) I.B. & S. 393.

(2)
(1833) 4 B. & Ad. 433.

(3)
(1915) A.C. 847 (853).

(4)
A.I.R. 1934 Cal. 682.

(5)
A.I.R. 1936 Cal. 663.

(6)
A.I.R. 1957 Punj. 169.

(7)
(1950) 52 P.L.R. 117.

(8)
(1915) I.L.R. 38 Mad. 753.

(9)
(1887) 18 Q.B.D. 685 (696).

(10)
A.I.R. 1923 Lahore 255.
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(11)
A.I.R. 1932 Lahore 401 (411).

(12)
A.I.R. 1942 Patna 247.

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