PANNALAL versus STATE OF BOMBAY AND ORS.

Fm-,, II.

980 SUPREME COURT REPOkTS (1964] VOL.

PANNALAL

STATE OF BOMBAY AND ORS.

(P. B. GAJENDRAGADKAR, K. N. W..lNCHOO, M. HrnAYATULLAH, K. C. DAS GUPTA and J.C. SHAH, JJ.)

Ciuil Procdurt-Respowknt seeking rtlief 114ain4' u-rtapondenl by way of cro88-objerlion-Pawer of Court of ApptaJ.-Code of Civil Prowlure, 1~08 (Act 5 of 1908), 0. 41, rr. 22, 33.

The appellant brought thror. suiis claiming full payment with interest in respect of three hospitals constructed by him in execution of th1ce separate contracts between hirn and the Deputy Cotnmissiouer. 'l'he trial Judge decreed the suits for part of his c!.im against the State of Madhya Pradesh and held that other defendants were not liable, and accordingly dismissed the suits against them. On appeals preferred by the State of Madhya Pradesh, the High Court set aside the decree against the State Government and allowed the appeals with costs. The plaintiff at that stage prayed for leave of the High Court to file cross-objection and also for decrees to be passed against the Deputy Commis.ioner under 0. 41, r. 33 of the Code of Civil Procedure, which was rejected and all the suits were dismissed. It was urged thal (I) the State Government was liable in respect of all of these contracts and (2) the High Court ought to have g1anted relief against such of the other defendants as it thought fit under 0. 41, r. 33 of the Code of Civil Procedure.

Held, that the State Government was not liable in respect of any of the3e contracts.

lleld, further, that the wide wording of 0. 41, r. 33 empowers the appellate court to tn;tkc y.·halcver order it thinks fit, not only as between the app<"ll.lnt anc.l the respondent hut also as l>et\veen re~ponc.lcnt and respondent. It could not be said that if party who coulJ have filcc..I c1oss-objcction under 0. 41, r. 22 did not do><>, the appeal court could under no circumstances give hlm relief under the provision of 0. 41, ... r. 33. Order 41, r. 22 permits as general rule, respondent to prefer an objection directed only again1t the appelhnt and

1 s.c.:R. SUPREME COURT RF.PORTS

it is only in exceptional cases that an objection under O. 41, r. 22 can be directed against the other respondents. On the <I facts of these cases the High Court refused to exercise its poweJS under 0. 41, r. 33 on an incorrect view of the law and so the appeal must be remanded to the High Court for decision what relief should be granted to plaintiff under 0. 41 r. 33.

Burroda Soundree Da&ee v. Nobo Gopal Mullick, (1864) W.R. 294, Maharaja Tarucknath Roy v. Tubooruni"a Ohowdhrain, (1867). 7 W.R. 39, Gane.h Pandurang Agt• v. Gangadhar Ramakrishna, (1869) 6 Born. H.C.Rep. 2244, Anwar Jan Bibee v. Azmut Ali, (1870) 15 W.R. 26, Tirmnama v. Lakshmanan, (1883) 7 Mad. 215. Venkate•waruiu v. Rammama, I.L.R. (1950) Marl. 874, Jan Mohamed v. P. N. Razden, 1U.R. (1944) Lah. 433 and Vhandiprasaa v. Jugul Kishore, A.1.R. (1948) Nag. 377, referred to.

Anath Nath v. Dwarka Nath, A.I.R. (1939) P. C. 86, held inapplicable.

CrvIL APPELLATE JURISDICTION : Civil Appeals Nos. 207 to 209 of 1961. .

Appeals from the judgment and decree dated August 23, 1957, of the Bombay High Court at Nagpur in First Appeals Nos. 105 to 107 of 1952 from Original Decree.

S. T. Desai, J. B. Datb.lchanji, 0. C. Mathur

and Ravinder Narain, for the appellants.

C. K. Daphtary, Solicitor General of India,

N. s, Bindra and R. H. Dhebur for P. D. Menon, for the respondent No. 1.

Girish Chandra for Sarrfor Bahadur, for respon-dents Nos. 3 and 8 .

.. 1963. February 11. The Judgment of the Court was delivered by

DAS GUPTA, J.-The appellant is building contractor. He constructed buildings for the Bai

/9b3 PIUUla/ol •• 81411 of Bom6oy

Das Gupta, J.

1163 r-o1a1 •• SIMI of Homb•.J Da.s Gupt•, J.

Gangabai Memorial Hospital, Gondia, Kunwar Tilaksingh Civil Hospital, Gondia, and also for the Twynam Hospital, Tumsar, all within the district of Bhandara in Madhya Pradesh, in execution of three separate contracts in respect of the three hospitals which were concluded between him and Deputy Commissioner of Bhandara. Though he received part payment in respect of each of these contracts he claims not to have received full payment of what was due to him. On April I, 1948 he brought the three suits out of which these three appeals have arisen for obtaining payment! which he claims was due to him. His averments in all the three plaints are similar, except that in respect of one of the suit~, viz., the one in respect of the construction work done for the Bai Gangabai Memorial Hospital, he has also claimed the price of some furniture said to have been supplied by him at the request of the Deputy Commissioner. The common case of the plaintiff in these three suits was that the Deputy Commissioner entered into these contracts "as repre-senta1ive of the Provincial Government" after having obtained p1evious sanction of that Government. It was further his case that the Deputy Commissioner, Bhandara, as the administration head of the hospitals entered into these contracts and as such was liable to pay the amounts due on the contracts. The plaint also averred that the Gondia Municipal Committee, Gondia, in the suit in respect of Bai Gangabai Memorial Hospital an·d the Dispensary Funds Committee in the other two suits were liable to satisfy plaintiff's claim inasmuch as they had taken the benefit of the work done under the contract which was not intended to be done gratuitously. On these averments the plaintiff impleaded the Provincial Government of the Province of Central Provinces and Berar as the first defendant, and the Deputy Commis-sioner of the Bhandara District, as the second defen-dant, in all the three suits. The Gondia Municipal Committee was impleaded as the third defendant in

:.r(""< :1,, ~)~ i' '·.

Suit No. 3-B of 1948, i. e., the suits in ;~sp~ct of Bai Gangabai Memorial Hospital. The Dispensary Funds Committee was implea'tl_ea as the third defen-dant in the other two suits. In both, the members of the Dispensary Funds Committee were also implead-ed by name as defendants. Mr. G. K. Tiwari, who as Deputy Commissioner, Bhandara, signed the argu-ment was impleaded in his personal capacity in all the three suits (Defendant No. 4 in Suit No. 3-B, Defendant No. 9 in Suit No. 2-B and defendant No. 14 in Suit No. l·B). The State of Madhya Pradesh was later substituted for the Provincial Government of the Province of Central Provinces and Berar as the first defendant in all the three suits.

It was admitted in the plaint that the cons-truction could not be completed within the time mentioned in the contracts but it was pleaded that the time was not the essence of the contract and further, that the delay was due to the Deputy Commissioner's failure to supply the necessary materials in time and inclemency of weather and also that time was extended by the Deputy Commiss-ioner. In all the three suits the plaintiff made his claim at higher rate than the contract rate on the plea that the Deputy Commissioner had sanctioned these higher rates. For the purpose of the present appeals in which we are concerned solely with question of law it is unnecessary to mention the vari-ous other averments in the plaint.It is necessary to mention however that in Suit No.3-B the plantiff asked for decree of Rs. 21,2dl/· with costs and interest from the date of suit against defendants 1 to 3 and in the alternative, against defendant No. 4, i. e., Mr. G. K. Tiwari. In suit No. 1-B, the plaintiff claimed decree for Rs. 12,000/- with full costs and future interest from ~ the date of suit against defendants 1 to 3 and/or defendant No. 14, i.e., Mr. G. K. Tiwari. In Suit

1963 Pannalal •• Slate of Bombay Das &upt1, J.

'--,---;-/~..-::-·~ ;\ . .,~, ·,, i_ -984 . :-i. su'i>REl\fECOURTREPORTS ·.,. • . ~ I ·' I, [1964] vot. No. 2-B, the·. plaintiff· 'asked--for·-a-dccrce for Rs. :32,208/- with costs and future interest against defendants l to 3 and/or defendant .. No .. 9, i. e., Mr. G. K. Tiwari. \

·, S~tµ• of /Jombaj'

Das qupta, ·J •.

The ·main contention of the State of Madhya Pradesh in resisting the suits was that the agreement ...... for the construction of the buildings was not macle on behalf of the State Government and also that the hospital· was not government hospital and therefore it had 'no···Iiability. · The same.contentions were raised by the Deputy Commissioner,. Bhandara and Mr. Tiwari, personally. All of· them further conten-ded that even on . merits the plaintiff was not entitled to any relief, for, though time was essence of the , contract the .work was not finished within the time ·,agreed upon. ·They also resisted:the · plantiff's claim to increased rates on the ground· that the previous sanction of the Deputy Commissioner had not been obtained. Another contention. raised in all the suits · was that the· plaintiff's claim was barred by time. The other defendants also contested the suits on grounds· which it is unnecessary for the purpose of the present appeals to set out.

The Trial Judge held that the agreements in question were made for· and on. behalf of the State and further, that ·the · constructions ·had "beyond doubf benefited the State" and so the State was liable. The learned Judge also rejected the vari-ous objections raised by ··the; defendants to the plaintiff's claim on merits ·except that he disallowed part of the plaintiff's claim and gave the plaintiff decree for part of his claim . against the ·State of Madhya Pradesh in all the three suits.' He also held that none of the other defendants were liable and dismissed the suits as against them.

. Against the Trial Court's decision in these suits the State of Madhya Pradesh preferred appeals to

1 s.c.R..

the High Court of Judicature at Nagpur. During the pendency of these appeals the State of Madhya Pradesh was substituted by ,the State of Bombay. ., In all these appeals the plaintiff Pannalal was impleaded as the first respondent; and all the other defendants were also impleaded as respondents. Disagreeing with the Trial Court the High Court held that the contract entered into by the Deputy Commissioner was not binding on the State Govern-ment; that the Deputy Commissioner ·signed the contract at his own discretion; and further, the c'ontracts not having been entered into in the form

~ as required under s. 175(3) of the Government of India Act, 1935, were not enforceable against the State Government. The High Court also held that the Government could not be held to have ratified the action of the contracts entered into by the Deputy Commissioner. The High Court also rejected the argument that the Government having received the benefit of the works must pay for them, on their finding that the hospitals were not government , hospitals and Government "can in no sense be regard-ed as having benefited by anything done with respect to them". On these findings the High Court set asi.de the decree passed by the Trial Court against the State Government and allowed the appeals with costs.

It appears that prayer was made on behalf

of the plaintiff-respondent that the High Court should < pass decrees against the Deputy Commissioner, Bhandara, under Or. 41, r. 33 of the Code of Civil Procedure. That prayer was rejected by the High Court in these words : -

"Shri Phadke then prayed that under Order 41, rule 33 of the Code of Civil Procedure we should pass decrees against the Deputy Commissioner, Bhandara, who was indubitably, party to the <1;QQtrlicts. Though the provisions of Order 41,

1963 Pannol•l v. St .ti oj Bo• bay Dos GuPI•, J.

1963 Pannalal v. Stoi. of BomkJ Du G,,p to, J.

rule 33 are wide enough to permit this we do not see any reason why we should exercise our power when it w115 open to the respondent No. 1 to prefer cross-objection against the dismis.~al of his suits against those defendants, as well as against some other defendants."

The High Court also rejected the Counsel's

prayer to grant him leave to file cross-objection at that stage. In the result, all the three suits were dismissed by the High Court in their entirety. The High Court however granted certificate under Art. 133(1)(c) of the Constitution. On the basis of that certificate these three appeals have been preferred by the plaintiff.

Two grounds were urged in support of the

appeals. The first was that the High Court was wrong in holding that the State Government was not liable. The second ground urged was that, in any case, 1he High Court ought to have granted relief to the plaintiff against such of the other defendants as it thought fit under the provisions of Order 41, rule 33 of the Code of Civil Procedure.

There is, in our opinion, no substance in the

appellant's contention that the State Government was liable. On the materials on the record, it appears clear to us that the Deputy Commissioner did not act on behalf of the State Government in signing the contracts. Nor can it be said that the State Government derived benefit from the work done by the plaintiff. In our opinion, the High Court was right in its conclusion that the State Government was not liable in respect of any of these contracts and rightly dismissed the suits as against the defendant No. I. This position was not seriously disputed before us.

There is however much force in the appeUant's

contention that the High Court ought to have exer-ciscd its jurisdiction under Or. 41, r. 33 of the Code

of Civil Procedure in favour of the plaintiff. The operative portion of that rule, which was for the first time introduced in the Civil Procedure Code in 1908, is in these words :-

The

"33. The appellate court shall have power to pass any decree and make any order which --ought to have been passed or made, and to pass or make such further or other decree or order as the case may require, and this power may be exercised by the Court notwithstanding that the appeal is as to part only of the decree and may be exercised in favour of all or any of the respondents or parties, although such respon-dents or parties may not have filed any appeal or objection."

proviso was added to this by Act 9 of 1922 which, however, does not concern us. It is necessary however to set out the illustration to the rule which -runs thus:

"A claims sum of money as due to him from X or Y, and in suit against both obtains decree against X. X appeals and and Y are respondents. The appellate court decides in favour of X. It has power to pass decree against Y."

Even bare reading of Order 41, rule 33 is sufficient to convince any one that the wide wording was intended to empower the appellate court to make whatever order it thinks fit, not only as between the appellant and the respondent but also as between respondent and respondent. It empowers the appe-llate court not only to give or refuse relief to the appellant by allowing or dismissing the appeal but also to give such other relief to any of the respondent as "the case may require." In the present ca.~e, if there was no impediment in law the High Court could

1969 Pannotal •• Stute of Bombay Das Gupla, J.

Pattnnlal

s1_.u ~ Rom!ua DasGu~ta '·

therefore, though allowing the appeal of the State by dismissing the plaintiff's suits against it, give the plaintiff decree against any or all the other dcfen· dants who were parties to the appeal as respondents. While the very words of the section make this position abundantly clear the illustration puts the position beyond argument.

The High Court appears to have been in no doubt about its power to give the plaintiff relief by decreeing the suits against one or more of the other defendants. But say the learned Judges, "we do not think it proper to do so as the plaintiff could have asked for this relief by filing cross-objection under Or. 41, r. 22, C. P. C., but has not done so." The logic behind this seems to be that the cross-objection under Or. 41, r. 22 could be filed only within the time as indicated therein and if respondent who could have filed cross-objection did not do so, is given relief under Or. 41, r. 33, Or. 41, r. 22 is likely to become dead letter.

The whole argument is based on the assum-ption that the plain1 iff could, by filing cross·obje-ction under Or. 41, r. 22, Civil Procedure Code, have challenged the Trial Court's decree in so far as it dismissed the suits against the defendants other than the State; We are not, at present advised, prepared to agree that if party who could have filed cross-objection under Or. 41, r. 22 of the Code of Civil Procedure has not done so, the appeal Court can under no circumstances give him relief under the provisions of Or. 41, r. 33 of the Code. It is, how-ever, not necessary for us to discuss the question fur-ther as, in our opinion, the assumption made by the High Court that the plaintiff could have filed crosa-objection is not justified.

Whether or not respondent can seek relief

against any other respondent by cross-objection

under Or. 41, r. 22. Civil Procedure Code, wu vexed question in Indian courts for long time. The present Order 41, r. 22 has taken the place of the former s. 561 of the Code of 1882. Indeed, the provision as regards raising an objection by respondent without separate appeal appean even in the C.ode of 1859 as s. 348. The same provi· sion in little more detailed form was enacted in the Code of 1877 as s. 561. It was reproduced in the Code of 1882 also as s. 561 with slight amend-ments in these words :-

"Any respondent though he may not have appealed against any part of the decree, may upon the hearing not only support the decree on any of the grounds decided against him in the court below, but take any objection to the decree which he could have taken by the way of appeal, provided he has filed notice of such objection not less than seven days before the date fixed for the hearing of the appeal. Such objection shall be in the form of memo-randum, and the provisions of s. 541, so far as they relate to the form and contents of the memorandum of appeal shall apply thereto.Unless the respondent files with objection written acknowledgement from the appellant or his pleader of having received copy there-of, the Appellate Court shall cause such copy to be served, as soon as may be after the filing of the objection, on the appellant or his pleader, at the expense of the respondent."

The question whether respondent could by way of cross-objection seek relief against another res-pondent under these provisions was first raised before tbe courts almost century ago. Both the Calcutta and the Bombay High Courts held in number of cases that ordinarily it was not open to respondent

11161 P-..141 y, Sta11 ef &NG Du Gu/Ito, J,

1'6J r-.i.1 v. St.11 ~J Bamb"J" Dos Gupt•, J,

990 SUPREMECOURTREPORTS[1964] VOL.

to seek relief as against co·respondcnt by way of objection, though in exceptional cases this could be done. (Vide Burroda Soundree Dos8ee v. Nobo Gopal Mullick ('), Maharaja Tarucknath Roy v. Tuboornnissa Clwwdhrain ('), Ganesh Pandurang Agte v. Gangadhar RamkriBhna (') , Anwar Jan Bibi v. Azmut Ali('). These decisions it is proper to mention were given under the Code of 1859 where s. 348 provided that "Upon hearing of the appeal, the respondent. may take any objection to the derisio11 of the lower court which he might have taken if he had prckrred separate appeal from such decision." After this section was replaced by s. 561 in the Code of I~ 77 and the Code of 1882 the question whether respondent can file an objection against another respondent came up before the courts several times and the decision r~mained the same. The Patna and the Allahabad High Courts also took the . view that as general rule the right of respondent to urge cross objections should be limited to asking relief against the appellant only and it is only where the appeal opens up questions which cannot be di1posed of properly except by opening up matters as between co-respondents that relief against respondents can also be sought by way of objccti<ms. The ~fadras High Court took different view in 'l'immayya v. Lafahman11n ('), and held that the words of the section were wide enough to cover all objections to any part of the decree and it was open to respondent t seek relief under this section even against another respondent, and this view was reiterated by that Court even after the Code of 1908 made an important -change in the provision by using the word "cross-objection" in place of "objection". Ultimately however in I 050 Full Bench of the Madras High Court in Venkatesu:arlu v. Ram1n11ma ('), considered the question again and decided overruling all pre· vious decisions that on proper construction of the langua~e, Or. 41, r. 22 confers only restricted

(I) (1864\ W.R. 294. (2) (1867) 7 W.R. 39. 13) (1809) 6 Bom. H.C. Rep. 2+1. (•) (1870) 15 (5) (1883) 7 Mad. 215. (6) I.L.R. (1950) Mad. 874 .

(•) (1870) 15 W.R. 26.

(6) I.L.R. (1950) Mad. 874 .

I S.C.R.

right on the respondent to prefer objection to the decree without filing separate appeal; that ~uch objection should, as general rule, be primarily against the appellant, though in exceptional cases it may incidentally be also directed against the other respondents. The Lahore High Court which had earlier followed the former view of the Madras High Court also decided in Jan .Mohamed v. P. N. Razden (' ), to adopt the other view held by the High Courts of Allahabad, Bombay, Calcutta and Patna. The Nagpur High Court has also adopted the same view. (Vide Ohand,iprasad v. Jugul Kishore) (').In our opinion, the view that has now been accepted by all the High Courts that Order 41, r. 22 permits as general rule, respondel)t to prefer an objection directed only against the appellant and it is only in exceptional cases, such as where the relief sought against the appellant in such an objection is intermixed with the relief granted to the other res. pondents, so that the relief against the appellant can· not be granted without the question being re-opened between the objectin~ respondent and other respon-dents, that an objection under Or. 41, r. 22 can be directed against the other respondents, is correct. Whatever may have been the position under the old s. 561, the use of the word "cross-objection" in Or. 41 r. 22 expresses unmistakably the intention of the legislature that the objection has to be directed against the appellant. As Rajammannar C. J., said in Venkataswarlu v. Ramamma ('). "The legis-lature by describing the objection which could be taken by the respondent as "cross-objection" must have deliberately adopted the view of the other High Courts. One cannot treat an objection ·by respon-dent in which the appellant has no interest as cross-objection. The appeal is by the appellant against respondent, the cross-objection must be an objection by respondent against the appellant". We think, with respect, that these observations put

(I) A.I.R. 1944 Lah. 433. (2) A.I.R. 1948 Nag. 377.

(3) !.L,R, (1950) Mad, 874,

1969 Pon..Ual v. Stal• of B""bo.1 DOI Gupta, J.

,..,~ 9"1 Gt#l&,. J.

the matter clearly and correctly. That the legisla· ture also wanted to give effect to the views held by the different High Courts that in exceptional cases as mentioned above an objection can be prefen-ed by respondent against correspondent is indicated by the substitution of the word "appellant'' in the third paragraph by the words "the party who may be affected by such objection."

On the facts of the present case, we have come to the conclusion that it was not open to the plaintiff-appellant before the High Court to file any cross-objection directed against the other defendants who were-correspondents. The High Court was therefore wrong in refusing to consider what relief, if any, could be granted to the plaintiff under the provisions of Or. 41, r. 33, Civil Procedure Code.

Learned Counsel who appeared for the Gondia Municii>ality in Civil Appeal No. :!O!) of 1961, relied on the decision of the Privy Council in Anath Nath v. Dwarka Nath('), for his contention that rule 33 could not be rightly used in the present case. In that case the plaintiff challenged revenue sale as wholly void for want of jurisdiction and bad for irregularities and further contended that the respon-dent had been guilty of fraud or improper conduct to the prejudice of his co owners in the estate. The Trial Court rejected the plaintiff's case that the sale was void for want of jurisdiction and bad for irregu-larities but accepted the other contention and gave the plaintiff decree. On appeal, the High Court held that no fraud or improper conduct towards co-owners in respect of the revenue sale had been pro-ved against respondent No. I. The High Co4rt refused to grant any relief to the plaintiff on the other ground whi.ch had been rejected by the Trial Court in the view that it was no longer open to the plaintiff who had not filed any cross objections to the decree of the Trial Court to maintain that the revenue (tl A.J.R. 1m P.c. ae.

sale should be set aside for want of jurisdiction or irregularity. In accepting this view of the High Court the Privy Council observed :-

"In their Lordships view the case came clearly within the condition imposed by the concluding words ofsub-r. (1) of R. 22, "provided he has filed such objections in the Appellate Court, etc., etc.''. It was contended however that the language of R. 33 of the same Order was wide enough to cover the case. Even if their Lord· ships assume that the High Court was not wholly without power to entertain this ground ofappeal-an assumption to which they do not commit themselves-they are clearly of opinion that Rule 33 could not rightly be used in the present case so as to abrogate the impor-tant condition which prevents an independent appeal from being in effect brought without any notice of the grounds of appeal being given to the parties who succeeded in the courts below.''

This decision is of no assistance to the respon-dents. For the question which we have considered here, viz., how far it is open to respondent to seek relief against co-respondent by way of cross-objec-tion did not fall for consideration by the Privy · Council. The Privy Council based its decision on the view that it was open to the respondent before the High Court to file cross-objection under Or. 41, r. 22 against the appellant and had not to consider the question now before us. We think it proper also to point out that the decision of the Privy Council in Anatlo Nath's case ([1]), should not be considered as an authority for the proposition that the failure to file cross-objection-where such objection could be filed under the law_-invariably and necessarily excludes the application of Or. 41, r. 33. There their Lordships assumed, without deciding, that the

( 1) A,1,R, 1939 P, C, 86.

1963 Pannalal Stal1 of '· Bt1mbay D., GuJt•, /,

Pa,,11111.J v. ,\ta't of &dal~ l.ldJ Gu111. I,

High Court was not wholly without power to enter-tain the other ground of appeal but in the special circumstances of the case they thought that it would not have been right to give relief under the provisions of Ruic 33 tri the appellant.

As the High Court has refused to exercise its powers under Or. 41, r. 33 of the Code of Civil Procedure on an incorrect view of the law the matter has to go back to the High Court. We maintain the High Court's order in so far as it dismisses the suits a~ainst the State of Bombay but set aside the order m so far as it dismisses the suits against the other defendants and send the case back to the High ·. Court in order that it may decide, on an examination of the merits of the case, whether relief should be granted to the flaintifl' under the provisions of Or. 41, r. 33, Civi Procedure Code. Costs incurred in this Court will abide the final result in the appeals before the High Court at Bombay.

ppeala allowed in part. Case remanded.