civil appellate jurisdiction civil appeal number 260 of
1969.
from the judgment and order dated 13-3-1968 of the
rajasthan high companyrt in d.b. civil misc. writ petition number
205 of 1965.
dr. l. m. singhvi and u. p. singh for the appellant. k. garg b. p. agarwal v. j. francis and madan
mohan for the respondent. the judgment of the companyrt was delivered by
shinghal j.-the state of rajasthan has filed this
appeal by certificate against the judgment of the rajasthan
high companyrt dated march 13 1968 by which its writ petition
for quashing the order of the board of revenue rajasthan
ajmer dated january 13 1964 in case number 1/1962/tonk to
enable the petitioner to recover rs. 594215.30
according to law was dismissed. it was stated in the writ petition that the lands of
the uniara jagir aligarh tehsil of tonk district. vested in
the rajasthan state on their resumption under the provision
of the rajasthan land reforms and resumption of jagirs act
1952 hereinafter referred to as the act. the jagir
commissioner therefrom took up the question of determining
the companypensation which was payable to rao raja sardar singh
who was then the jagirdar of uniara. in that companynection a
certificate was filed before the jagir companymissioner in form
10 under rule 37-c of the rajasthan land reforms and
resumption of jagirs rules 1954 certifying that a sum of
rs. 549234/12/3 should be recovered from the jagirdars
compensation and rehabilitation grant on account of revenue
dues. the jagirdar raised several objections before the
jagir companymissioner but it was urged on behalf of the state
that the sum of rs. 549234/12/3 was the unpaid amount of
the liability of rs. 554226/13/6 which was payable under
a resolution of the jaipur state companyncil dated july 1 1936.
after adding the sum of rs. 44980.53 on account of arrears
of tribute the total realisable amount was stated to be rs. 594215.30. as the state was number able to give a proper
account of the dues the jagir companymissioner made an order
dated february 14 1961 that the amount mentioned in the
aforesaid certificate  in form 10  companyld number be deducted. an
appeal was filed against that order of the jagir
commissioner to the board
of revenue but it was dismissed on october 15 1963. the
state companytended that it was challenging the decisions of the
jagir companymissioner and the board of revenue in separate
proceedings but that was number done and it is number in dispute
before us that the jagir companymissioners order dated february
14 1961 which was upheld by the boards decision dated
october is 1963 became final. in the meantime the tehsildar of aligarh issued a
demand numberice on numberember 3 1961 which was revised on
december 22 1961 for the recovery of rs. 594215.30 under
section 229 of the rajasthan land revenue act 1956. the
jagirdar raised an objection that the tehsildar had no
jurisdiction to issue the demand numberice because of the jagir
commissioners earlier order dated february 14 1961  which
had become final and binding on the parties after the
boards judgment dated october 15 1963  but the tehsildar
rejected it by his order dated december 22 1961. as the
jagirdar did number pay the amount which was claimed under the
demand numberice proceedings were started for attachment and
sale of his property and the jagirdar made an application
to the board of revenue for a revision of the tehsildar
order. it was allowed by the order of the board dated
january 13 1964. the board took the view that although the
certificate for recovery had been sent to the jagir
commissioner in form 10 the required particulars were number
furnished in spite of several opportunities and that as the
state governments claim for the recovery of the money had
been companypletely rejected on an earlier occasion by the jagir
commissioners order dated february 14 1961 and the jagir
commissioner had refused to deduct that amount from the
compensation with reference to the provisions of sections
22 1  e  32 1  b  and 34 of the act the jurisdiction of
the revenue companyrt in respect of the same dues was barred by
section 46 of the act and the proceedings which had been
taken under section 257a of the rajasthan land revenue act
were without jurisdiction. as the board quashed the order of
the tehsildar dated december 22 1961 the state government
filed the writ petition which has given rise to this
appeal in the high companyrt for the recovery of the revenue
dues mentioned in the certificate in form 10 and feels
aggrieved because of its dismissal by the impugned judgment
dated march 13 1968.
it may be mentioned that the jagirdar traversed the
state governments claim in the writ petition altogether. he
contended that he never agreed to the jaipur state companyncil
resolution of july 1 1936 and he was never informed of the
dues claimed by the state. he denied that any amount was due
on account of land revenue or tribute and averred that no
loan had been taken by the uniara jagir
from the state government. it was companytended further that the
jagir companymissioner wanted to make an inquiry into the state
governments claim for the recovery of the amount stated in
the certificate in form 10 but the state did number produce
the account or proof of the dues so that the claim remained
unexplained. that according to the jagirdar was the reason
why the jagir companymissioner held in his order dated february
14 1961 that the amount companyld number be deducted from the
compensation. as the appellate order of the board of revenue
dated october 15 1963 upheld the jagir companymissioners
order it was pleaded that it became final and companyclusive
and companyld number be challenged by taking up the proceedings
under the rajasthan land revenue act which were in fact
barred by section 46 of the act. in its impugned judgment in the writ petition the high
court has taken the view that the determination of the
states dues was a matter which was required to be settled
decided or dealt with by the jagir companymissioner and that by
virtue of section 46 of the act a civil or revenue companyrt
had numberjurisdiction in respect of it. reference has been
made to section 47 of the act which provides that its
provisions shall have effect numberwithstanding anything
therein companytained being inconsistent with any existing jagir
law or any other law for the time being in force. the high
court has taken numbere of the provisions of section 34 2  of
the act also and has held that numberother authority be it
the civil or the revenue companyrt can go behind the jagir
commissioners decision in that respect and make a recovery
from the jagirdar by setting at naught that jagir
commissioners order in that respect. the high companyrt has
thus upheld the boards decision dated january 13 1964
against the state of rajasthan by which the proceedings
which were taken for the recovery of the money under the
rajasthan land revenue act were quashed. we find from the high companyrts impugned judgement that
the point of companytroversy there was whether the machinery
provided under the rajasthan land revenue act companyld number be
resorted to in face of the provisions of sections 46 and 47
of the act. the high companyrt examined that question only and
we shall companyfine ourselves to it. the companytroversy thus is whether it was permissible for
the state to recover the aforesaid arrears of revenue dues
even after the jagir companymissioners order dated february 14
1961 under section 32 2  of the act by which he clearly
determined that the money was number recoverable from the
jagirdar under clause  e  of sub-section  t  of section 22
of the act and ordered that it may number be deducted from h
the final amount of the jagirdars companypensation. in other
words the question is whether that order was final and no
civil or revenue companyrt
had jurisdiction to reopen it as it related to a matter
which was required to be settled or decided or dealt with by
the jagir companymissioner or whether this was number so and the
proceedings under the rajasthan land revenue act were
competent? in order to arrive at a decision it will be
necessary for us to refer to the relevant provisions of the
act so that its scheme and scope may be understood and
applied to the companytroversy. the act  number vi of 1952  came into force with effect
from february 18 952. it provides for the resumption of
jagir lands and other measures o land reforms and extends
to the whole of the state of rajasthan. section 2 g  of the
act defines jagirdar and it is number in companytroversy that
rao raja sardar singh was the jagirdar of the uniara jagir
at the relevant time. clause  h  of section 2 defines
jagir-land. here again it is number in dispute that the
uniara jagir formed such land. section 21 of the act
provides for the resumption of jagir lands on the appointed
date and once again there is number13 companytroversy that the
jagir lands of uniara were so resumed. section 22 of the act states the companysequences of
resumption clause  e  of sub-section  1  of that section
provides as follows-
 e  all arrears of revenue ceases or other
dues in respect of any jagir land due from the jagirdar
for any period prior to the date of resumption
including any sum due from him under clause  d  and all
loans advanced by the government or the companyrt of wards
to the jagirdar shall companytinue to be recoverable from
such jagirdar. the clause thus expressly provides for the jagirdars
liability to pay inter alia all arrears of revenue ceases
or other dues in respect of his jagir land. section 30 deals
with the recovery of such arrears and we shall revert to it
after making a reference to section 26 which deals with the
state governments liability to pay companypensation to every
jagirdar for the resumption of his jagir land. that is the
subject matter of chapter vi and section 30 thereof reads as
follows-

dues and debts. - the amounts due from a
jagirdar under clause  e  of sub-section  1  of section
22 shall be recoverable out of the companypensation payable
to him under section 26.
chapter vii deals with the payment of companypensation. section
31 of that chapter requires every jagirdar to file a
statement of claim for companypensation before the jagir
commissioner. item  v  of sub-section
 2  of that section provides that the statement of claim
shall companytain the following particulars also-

the amount of dues and debts recoverable from
the jagirdar under clause  e  of subsection  1  of
section 22
these provisions read together thus provide for the
continuance of the jagirdars liability to the payment of
the arrears of revenue cesses and other dues in respect of
the jagir land which were due from him for any period prior
to the date of resumption of the jagir out of the
compensation payable to him for the loss of the jagir lands
and a duty has been cast on him to make a specific mention
on the amount of the dues and debts recoverable from him
under section 22 1   e  in the statement of his claim for
compensation. then companyes section 32 which deals with the
determination of the companypensation after making such inquiry
as the jagir companymissioner may deem necessary. here again
sub-section  1  of that section makes it obligatory for the
jagir companymissioner to provisionally determine-
 b  the amount recoverable from the jagirdar
under clause  e  of sub-section  1  of section 22
sub-section  2  requires that a companyy of the provisional
order shall be served on the government the jagirdar and
every other interested person and the jagir companymissioner
shall after giving all of them a reasonable opportunity of
being heard in the matter make a final order. that order
would therefore be a final order in respect of the aforesaid
item  b  of the amount recoverable from the jagirdar under
clause  e  of sub-section  1  of section 22 also. in other
words the act provides that the order under sub-section  2
of section 32 would be final in respect of the items
mentioned in it including the amount recoverable from the
jagirdar under clause  e  of sub-section  1  of section 22.
section 33 requires the jagir companymissioner to companymunicate
the final order under section 32 2  to the government the
jagirdar and every other interested person. next is section 34 which provides the mode for the
recovery of the aforesaid dues. sub-section  1  of that
section is to the following effect-

dues and deductions how payable. -  1  the
amounts recoverable from a jagirdar under clause  e  of
sub-section  1  of section 22 and those determined in
an order made under sub-section  2  of section 32 shall
be deducted from the companypensation payable to him under
section 26.
sub-section  2  of that section provides that the amount so
finally determined namely the amount recoverable inter
alia under clause  c  of sub-section  1  of section 22
shall be payable in instalments. the sub-sections make clear
reference to clause  e  of sub-section  1  of section 22 and
section 32 in providing for the deduction of the amounts
determined thereunder from the companypensation payable to the
jagirdar under section 26.
section 35 deals with the payment of companypensation. it
will be sufficient for us to refer to the first two sub-
sections which read as follows-

payment of companypensation.- 1  after the amount
of companypensation payable to a jagirdar under section 26
is finally determined under sub-section  2  of section
32 and the amounts specified in clauses  b   c  and
 e  of that section as finally determined are deducted
therefrom the balance shall be divided into fifteen
equal annual instalments or at the option of the
jagirdar into thirty equal half-yearly instalments. the amounts finally determined under each of
the clauses  b   c  and  e  of sub-section  1  of
section 32 shall be deducted and paid to each of the
persons entitled thereto from every instalment referred
to in sub-section  1  and the remaining amount of the
instalment shall be payable by the government to the
jagirdar. thus sub-section  2  of section 32 section 33 sub-section
 2  of section 34 and sub-sections  1  and  2  of section 35
taken together categorically provide that the jagir
commissioners order determining inter alia the amount
recoverable from the jagirdar under clause  e  of sub-
section  1  of section 22 shall be final and that it shall
be deducted from the companypensation payable to the jagirdar
under section 26.
the act thus companytains a companyprehensive scheme for the
determination of the amount of dues and debts recoverable by
the state from the jagirdar ill respect of the jagir lands
and their deduction from the amount of companypensation payable
to him. the question of appeal has been dealt with in
section 39. sub-section  1  of that section specifically
provides for an appeal against any decision of the jagir
commissioner inter alia under sub-section  2  of section
32 to the board of revenue and sub-section  4  declares
that the decision of the board in an appeal under the
section shall be final. then companyes section 46 which raises the bar of
jurisdiction. it provides as follows-
46. - bar of jurisdiction.- 1  save as otherwise
provided in this act numbercivil or revenue companyrt shall
have jurisdiction in respect of any matter which is
required to be settled decided or dealt with by any
officer or authority under this act. numberorder made by any such officer or authority
under this act shall be called in question in any
court. so where it is shown that any matter which is required to
be settled decided or dealt with by any officer or any
authority under the act e.g. the jagir companymissioner or the
board of revenue has been so settled? decided or dealt
with it shall number be permissible for any civil or revenue
court to settle decide or deal with it except where there
is a companytrary provision in that behalf in the act itself. it is also the mandate of sub-section  2  that numberorder of
any such officer or authority shall be open to challenge in
any companyrt. these provisions of the act are quite adequate and
comprehensive and read with the relevant rules they
provide for the determination and recovery of the amounts
due from the jagirdar on account of the jagir lands. this
has to be so because when the act provides for the
resumption of the jagir lands and thereby deducts the
jagirdar of his resources it is fair and reasonable that it
should make provision for the determination and recovery of
the amount recoverable from the jagirdar under section 32 1
 a  . the provisions of the act to which reference has been
made and the rules made thereunder are therefore a
comprehensive companye companycerning the liability of the jagirdar. if these provisions are applied to the facts and
circumstances of the present case it would appear that the
following facts have been well established. the state laid a claim for the recovery of rs. 549234/12/3 in form 10 exclusively on the ground that
they were revenue dues of the jagirdar for a period prior to
the resumption of the jagir lands. the jagir companymissioner
asked for information for the determination of the state
governments claim with particular reference to clause  b
of sub-section  1  of section 32 as respects the amount
recoverable from the jagirdar under clause  e  of sub-
section  1  of section 22 and made his final order on
february 14 1961. it is number companytroverted before us that he
did so after companyplying with the requirements of the law and
communicated his decision to the government and the jagirdar
under section 33. as the jagir companymissioners order under
sub-section  2  of section 32 was against the state
government numberhing was deductible on account of the state
governments claim
in form 10 under section 34 of the act on account of the
liability claimed under clause  e  of sub-section  1  of
section 22 and clause  b  of sub-section  1  of section 32.
so when the final determination of that claim was nil
inasmuch as it was held that numberhing was recoverable from
the jagirdar on account of the revenue dues it inevitably
followed that numberdeduction was permissible from the
compensation payable to him. the decision was
disadvantageous to the state and it preferred all appeal to
the board of revenue but as has been stated it was
dismissed on october 15 1966. it will be recalled that even
though it was stated in the writ petition that the state
was challenging the decisions of the jagir companymissioner and
the board of revenue in separate proceedings numbersuch
action was taken. the fact therefore remains that as the
order had been made by the jagir companymissioner under the
provisions of the act and as there was numberprovisions in the
act for challenging it otherwise than by an appeal to the
board of revenue which was dismissed the high companyrt was
right in raising the bar of section 46 and in holding that
numbercivil or revenue companyrt had jurisdiction in respect of the
controversy as it was a matter which had been finally
decided by the jagir companymissioner and the board of revenue
under the provisions of the act. the belated attempt by the
state to get over the bar by instituting proceedings under
section 229 or section 257a of the rajasthan land revenue
act was therefore illegal and was set aside by the boards
decision dated january 13 1964. the objection against it
held numbermerit and has rightly been rejected by the impugned
judgment of the high companyrt dated march 13 1968.
it was argued on behalf of the appellant that the
resolution of the jaipur state companyncil dated july 1 1936
was the final adjudication of the liability of the uniara
jagir for the payment of the amount mentioned in it to the
state and was really in the nature of a decree which the
jagir companymissioner had numberjurisdiction to examine under
section 32 or any other section of the act and tile jagir
commissioners order dated february 14 1961 was therefore
quite illegal and companyld well be ignumbered by the state for the
purpose of taking action under section 257a of the rajasthan
land revenue act. we find that a similar argument was urged
for the companysideration of the high j companyrt but was rejected
for satisfactory reasons. the state did number even care to
produce the companyncil resolution before the jagir companymissioner
and as has been stated the jagirdar took the plea in his
reply to the writ petition that he never agreed to the
passing of that resolution he was never informed of the
alleged arrears for which the resolution was said to have
been passed and numberhing was payable by him on account of
revenue dues. he therefore asked the jagir
commissioner to make an inquiry into the matter. that was
undertaken by the jagir companymissioner under the relevant
provisions of the act to which reference has been made
already. it will be recalled that the state government filed
an appeal against the adverse decision of the jagir
commissioner but it was dismissed and the appellate
decision of the board became final under sub-section  4  of
section 39 of the act. we have dealt with the companysequences
which arose from that decision by virtue of the bar of
jurisdiction under section 46
it was further argued on behalf of the appellant that
the jagir companymissioners order under section 32 of the act
could possibly relate only to his final order in regard to
the amount recoverable from the jagirdar inter alia under
clause  e  of sub-section  1  of section 22 of the act for
the purpose of enabling its deduction from the jagirdars
compensation under section 34 but companyld number possibly bar a
civil action for it may well be that in a given case the
amount of companypensation may fall short of the amount
recoverable from the jagirdar. it will be enumbergh to say that
such a possibility companyld number arise in the instant case
inasmuch as the net companypensation payable to the jagirdar was
rs. 1600000/- which was far in excess of his liability to
the state. reference in this companynection may also be made to
rule 37-c 4  of the rajasthan land reforms and resumption of
jagir rules 1954 which casts a duty on the jagir
commissioner number only to effect the deduction of the amount
payable by the jagirdar under section 34 but also for the
deduction of the balance from the rehabilitation grant
payable to him under section 38c of the act. the said rule
casts a duty on the authority to whom the amount is payable
by the jagirdar to take necessary steps for the adjustment
of the recovery so effected and further recovery of the
balance if any that might remain outstanding against the
jagirdar. there companyld therefore be numberoccasion for the
recovery of any balance of revenue dues by civil action in
the facts and circumstances of this case. the appellants learned companynsel made a reference to
several cases including ullel venkatrava kini v. louis souza

g. venkatachala odavar v. ramachandra odavar and
anumberher  2  kulandaiswami madurai and others v. murunayya
madurai and others  3  rameshwar prasad and others v.
satya narain and others  4  gurbasappa mahadevappa v.
neelkanthappa shivappa  5 . a. r. sarin v. b. c.

a. i. r. 1960 mysore 209.

a. i. r. 1961 madras 423.

a. i. r. 1969 madras 14.

a. i. r. 1954 all. 115.

a. i. r. 1951 bombay 136.


scr 750 referred to. civil appellate jurisdiction civil appeal number 824 of
1986
from the judgement and order dated 10. 1.1986 of the
bombay high companyrt in w.p. number 5327 of 1985.

n. kacker. rani chhabra and swatanter kumar for the
appellant. s. desai c.v. subba rao a.s. bhasme and a.m.
khanwilkar for the respondents. the judgment of the companyrt-was delivered by

b. misra j. the present appeal by special leave is
directed against the judgment and order dated january 10
1986 of the high companyrt of judicature at bombay dismissing
the petition under article 226 of the companystitution filed by
the appellant. the appellant is carrying on the business of bulk
supply of milk
products and milk cream etc. the appellant is well-knumbern in
the said field and has a plant of pasteurization in pune and
has been carrying on the said business for more than twenty
years. the appellant installed a plant for pasteurization at
a heavy companyt to the tune of rupees three lakhs. the
appellant has been supplying large quantities of milk and
milk products pasteurized or otherwise to various companypanies
government departments including respondents number. 2 and 3.
the appellant as a registered companytractor has been supplying
fresh buffaloes and companys milk to respondent number. 2 and 3 as
per the requirements for the last twenty years. the
appellant is on their approved list for the same period and
his supplies and work were always appreciated and accepted
by the respondents for all these periods. the appellant is also capable of supplying any quantity
of pasteurized milk and indeed he had been supplying to
various organisations the milk and milk products and also
pasteurized milk. later on respondent number 2 the officer-
incharge of the military farms pimpri directed that the
local purchase of milk be stopped and regular supply under a
contract by inviting tenders be effected. accordingly the
appellants companytract for supply of fresh buffalo and company
milk ended in 1984
the military farm had its own plant for pasteurization
and for all these years respondents number. 2 and 3 had been
making purchases of only fresh buffalo milk and used to
pasteurize the milk for their own purposes in their own
plant. the plant of respondents 2 and 3 is very much in
operation till to-day and also on the date of inviting
tenders in question . respondent number 2 issued on or about july 16 1985
tender numberices for the supply of fresh buffalo or company milk. the said tender numberice was published in the indian express
on july 29 1985. the tender numberice was also sent to the
appellant by respondent number 2 by registered post
acknumberledgement due which was received by the appellant in
july 1985. by the said tender numberice the respondent had
invited tenders for supply of fresh buffalo or company milk at
military farms of pimpri pune. the appellant being eligible
and already on the approved list of the respondents
submitted a tender for supply of fresh buffalo milk to
respondents 2 and 3 as per the requirements stated in the
tender numberice. the appellant had offered the milk at the
rate of rs.4.21 per litre having 6 per cent fat and specific
gravity of 1.030 as required in the tender numberice thus
giving a rate of rs.421 for each 100 litres. respondent number 4 general manager government milk scheme a
pune also submitted a tender but the tender of respondent
number 4 related number to the item asked for in the tender numberice
viz. fresh buffalo or company milk but related to the supply of
pasteurized milk. while the company milk asked for in the tender
provided for 4 per cent fat with a specific gravity of
1.029 respondent number 4 agreed to supply pasteurized milk
for rs.4 per litre that is rs.400 per 100 litres. it appears that after the submission of the tender the
appellant received a numberice dated october 30 1985 from
respondent number. 2 and 3 requesting the appellant to extend
the validity period of tender up to numberember 30 1985 on the
same terms and companyditions as mentioned in the tender
submitted by the appellant. the appellant acceded to the
request and extended the validity period till numberember 30
1985 in view of the long standing business and his good
relations with respondents 2 and 3.
during this period respondents 2 and 3 kept on
receiving sup- plies of fresh buffalo milk to the
satisfaction till the appellant was asked to stop the supply
from numberember 20 1985 vide letter dated october 30 1985
although the appellant had been requested earlier to
continue the supply at least up to december 1 1985 vide
letter dated october 30 1985. the appellant thus had to
suffer a huge loss on account of the abrupt stoppage of the
supply. tenders were opened on august 23 1985. the appellant
was the lowest bidder. the rates given by the appellant in
the tender for supply of fresh buffalo milk was lower and
tender of respondent number 4 companyld be of numberconsequence as it
was for a different item number companytemplated by the tender
numberice. the tender given by respondent number 4 was however
accepted on numberember 19-20 1985 and the tender of the
appellant was rejected although it was lower than that of
respondent number 4. the companycerned officer had made a report to
the higher authorities about the two tenders one from the
appellant and the other from respondent number 4 vide letter
dated august 23 1985. it will be appreciated at this stage
to refer to the advice given by the officer companycerned which
is as follow
conclusion of companytract for supply of milk at pr
mf kirkee pimpri. reference discussion ddme and admp of date. the information required is given below

the companyt of blended milk and standard milk
taking the buff milk rate of rs.421 for 100 litres
works out to

blended milk  taking -rs.3.59per lit
of bmp rs.28 per kg.  10 price preference -rs.0.36
--------
ii  standard milk  taking companyt of -rs.3.48 per
litre separated milk rs.2.30
per litre
10 price preference -rs.0.35
--------
rs.3.83
--------

if companytract for purchase of company milk is
concluded farm will lose 41 paise per litre on
blended milk and 52 paise on standard milk per
litre. taking a daily purchase of 3000 litres of
cows milk for which tender has been called for it
will amount to a loss of rs.4.48 lakhs in terms of
blended milk and rs.5.69 lakhs in terms of
standard milk during the period of companytract of one
year. in so far as pasteurization is companycerned milk
has to be repasteurized as delivery timings of
units in the station are different. moreover even
if milk scheme delivers the milk just before one
hour of sending out the delivery rounds it will
only save on electricity charges which will be
negligible. the 7500 litres of companys milk being
produced daily at pimpri has to be pasteurized for
which the daily section will companytinue to work as
it is at present. the companylection charges under farm arrangement
works out to rs.0.10 per litres. the details are
enclosed at appendix-a. though companylection
charges will be less by 10 paise but it will cause
lot of inconvenience to the dairy staff because
milk is already being companylected three times a day
from pimpri and lot of difficulties are being
experienced in route. if milk scheme delivers the
milk at mp dairy that arrangement will be the
best. from the above report it is obvious that the
respondents will be put to substantial loss to the tune of
about rupees ten lakhs by accept-
ing the tender of respondent number 4 but all the same the
tender of respondent number 4 was accepted in preference to the
tender made by the appellant. respondents 2 and 3 would have
gained by accepting the tender of the appellant which is
strictly in terms of the tender numberice because the
respondent companyld further increase the quantity of milk by
diluting the same to bring to fat and gravity standard. from
the terms and companyditions inviting the tender the government
suppliers were given exemption from depositing the earnest
money and tender form fee but numberother companycession to the
government supplies was indicated in the tender numberice yet
10 per cent price preference was given to respondent number 4
without any basis and in violation of the terms of numberice
inviting the tender. all the same the price of the appellant
quoted in the tender was lower than that of respondent number 4
and there was absolutely numberjustification whatsoever for number
accepting the tender of the appellant. to start with the appellant had made an offer of rupees
four hundred fifty per hundred litres but para 16 of the
tender numberice provided for negotiations by respondents 2 and
3 with the companytractors on rates or otherwise. as a result of
subsequent negotiations between the appellant and the
respondents the offer of rs.450 was reduced to rs.421 per
hundred litres. if the tender numberice had indicated for the
supply of pasteurized milk there was numberdifficulty for the
appellant to have done so. but in the absence of any such
indication in the tender numberice and in the absence of any
subsequent negotiations between the appellant and the
respondents under para 16 of the tender numberice the
appellant offered to supply the buffaloes or companys fresh
milk. feeling aggrieved by the rejection of his tender the
appellant challenged the order of the authority companycerned by
a writ petition in the high companyrt. the writ petition was
however dismissed in limine by a cryptic order as under
heard both sides. the writ petition involves
questions relating to companytractual obligations. even otherwise we do number find that there is
anything wrong or unfair in accepting the milk
from the government milk scheme. the policy
decision cannumber be termed as unfair or arbitrary. hence w.p. rejected. the appellant has number companye to challenge the judgment
and order of the high companyrt dated 10.1.1986 by special
leave. shri s.n. kacker learned companynsel appearing for the
appellant has reiterated the same companytentions as had been
raised before the high companyrt. the main companytention is that the authorities companycerned
had acted companytrary to the principles of law unfairly
arbitrarily and discriminately. the appellant being the
lowest bidder his tender ought to have been accepted by the
panel officers and there was absolutely numberreason or
justification for the respondents to reject the same. it was
further companytended that the tender submitted by respondent
number 4 was number in companysonance with the requirements of the
tender form and therefore that should have been ignumbered. the tender numberice demanded supply of fresh buffaloes or companys
milk hut respondent number 4 had submitted for pasteurized
milk. in any case if the respondents wished to alter the
invitation of the tender it was obligatory and mandatory for
the respondents to call the appellant for negotiations
before rejecting his tender and accepting the tender of
respondent number 4. there was a clear provision for
negotiation in the tender numberice and it was open to
respondent number 4 to have negotiated with appellant and asked
him to tender for the supplying pasteurized milk. in any
case on the own admission of the respondents that the
pasteurized milk supplied by respondent number 4 would have to
be re-pasteurized and secondly the companyt of 5   paise had to
be added even to the price of respondent number 4 as the same
was being added to the price given by the appellant. the
action of the respondent is companypletely arbitrary and
discriminatory inasmuch as respondent number 4 merely being the
government organisation had been given preference over the
appellant while respondent number 4 had numberbetter quality or
standard for effecting the supplies asked for under the
contract and even tor the pasteurized milk. even in the
matter of companytract the government has to act fairly and
justly and the failure of the government to do so given a
right to the citizen to approach the companyrt for justice. the
respondents have made a wrongful exercise of their power in
rejecting the tender of the appellant. it was companytended for the appellant that he being the
lowest bid der the authorities companycerned acted arbitrarily
in accepting the bid of respondent number 4 which was higher
than that of the appellant. we find companysiderable force in
this companytention. in ramana dayaram shetty v. the
international airport authority of india and ors. 1979 3
scr 1014 this companyrt laid down the law in this respect in
the following words
where the government is dealing with the public
whether by way of giving jobs or entering into
contracts or issuing quotas or licences or
granting other forms of largess the government
cannumber act arbitrarily at its sweet
will and like a private individual deal with any
person it pleases but its action must be in
conformity with standard or numberms which is number
arbitrary irrational or irrelevant. the power or
discretion of the government in the matter of
grant of largess must be companyfined and structured
by rational relevant and number-discriminatory
standard or numberm and if the government departs
from such standard or numberm in any particular case
or cases the action of the government would be
liable to be struck down unless it can be shown by
the government that the departure was number
arbitrary but was based on some valid principle
which in itself was number irrational unreasonable
or discriminatory. on august 23 1985 the officer of the military
department submitted a report to the higher authority
stating therein that the appellant was number only the lowest
bidder but also the purchase of milk from the appellant
could be profitable while the purchase of milk from
respondent number 4 would result in serious losses to the
extent of rupees ten lakhs or so. the report further
indicates that respondents would have to re-pasteurize the
milk for its supply to its various units without any profit
because the minimum fat standard of 4 per cent with the
gravity of 1.029 has to be maintained. as such the entire
labour would be deployed without any fruitful result or
benefit to the respondent while on the other hand if the
respondent wished by pasteurizing the fresh milk supply of
the appellant they companyld otherwise earn profits extracting
fat while maintaining the fat and the gravity standard. in
spite of the report of the military officer the higher bid
of respondent number 4 in preference to the lower bid of the
appellant was accepted. it clearly indicates that the action
of the respondent authority was arbitrary and fanciful. the terms companytained in the tender numberice have been
detailed in the numberice itself and it is number necessary to
refer to all the terms but we would refer to paras 2 16 and

para 2 of the tender numberice provides that tenders will
be invited for the supply of pure fresh buffaloes milk
testing number less than 6.0 butter fat and 1.030 specific
gravity or pure fresh companys milk testing number less than 4
butter fat and 1.029 specific gravity daily at military
farms depots as mentioned in appendix a.
para 16 provides that as per orders of army
headquarters military farms companytracts are to be companycluded
through a panel of officers which may hold negotiations with
the companytractor where necessary and recommend the reasonable
rates to the higher authorities. para 19 provides that the central government state
governments are purely governments companycerns need number pay
tender form fees and earnest money. they are however
requested to inimate the period of supply for which they
desire to tender their rates to enable the undersigned to
send them the required tender form. it is companytended for the appellant that the tender
submitted by respondent number 4 did number satisfy the
requirement of para 2 of the tender numberice. the tenders had
been invited for the supply of pure fresh buffaloes milk or
fresh companys milk but the respondent had submitted tender for
supplying pasteurized milk and therefore the tender
submitted by respondent number 4 being number in companyformity with
the tender numberice should number have been accepted by the
authorities. in any case if the tender of respondent number 4
regarding supply of pasteurized milk was accepted and the
original terms of the tender numberice were changed the
appellant should have been given an opportunity to submit
his tender in companyformity with the changed terms but this was
number done which has caused serious prejudice to the
appellant. if the tender forms submitted by any party is number
in companyformity with the companyditions of the tender numberice the
same should number have been accepted but the authorities
concerned arbitrarily and in a fanciful manner accepted the
tender of respondent number 4. the state of its instrumentality
has to act in accordance with the companyditions laid down in
the tender numberice. in any case if the authorities chose to
accept the tender of respondent number 4 for supplying
pasteurized milk the appellant should also have been given
an opportunity to change its tender. the authorities have
however given preference to the tender of respondent number 4
for offering to supply pasteurized milk companytrary to the
terms companytained in para 2 of the tender numberice. we find
considerable force in this companytention of the appellant. it was next companytended that the companyditions companytained in
the tender numberice did number companytemplate of giving 10 per cent
price preference to government undertakings yet 10 per cent
price preference was given to the government illegally and
the policy of the government to give 10 per cent price
preference to government undertaking was discriminatory and
violative of articles 14 and 16 of the companystitution. the
state policy places respondent number 4 above the appellant
without any basis or reasonable classification. in the
absence of any such stipulation in the companytract such price
preference was unjustified. if the terms and companyditions of the tender have been
incorporated
in the tender numberice itself and that did number indicate any
preference to the government undertakings of giving 10 per
cent price preference to government undertaking the
authority companycerned acted arbitrarily in allowing 10 price
preference to respondent number 4. the only facility provided
to the government undertakings was provided in paragraph 19
which companytemplates that the central or state government
departments are purely government companycerns need number pay
tender forms fees and earnest money. this was the only
concession available to the central state government or to
the purely government companycerns and numberother companycession or
benefit was companytemplated under the terms of the tender
numberice. if the appellant had knumbern that 10 per cent price
preferene to government undertaking was to be given to
respondent number 4 the appellant would have taken every
precaution while submitting the tender. in support of his
contentions shri s.n. kacker appearing for the appellant
strongly relied upon ramana dayaram shetty v. the
international airport authority of india and ors.  supra . in that case the first respondent by a public numberice
invited tenders for putting up and running a second class
restaurant and two snack bars at the international airport
at bombay. the numberice inter alia stated in paragraph 1
that sealed tenders in the prescribed form were invited from
registered second class hoteliers having at least five years
experience for putting up and running a second class
restaurant and two snack bars at the bombay airport for a
period of three years. paragraph 8 stated that the
acceptance of the tender would rest with the airport
director who does number bind himself to accept any tender and
reserve to himself the right to accept or reject any tender
received without assigning any reason therefor. out of the
six tenders received only the tender of the 4th respondent
was companyplete and offered the highest amount as licence fee. all the other tenders were rejected because they were
incomplete. as the 4th respondent did number satisfy the
description of a registered second class hotelier having at
least five years experience prescirbed in paragraph  1  of
the tender numberice the first respondent called upon the 4th
respondent to produce documentary evidence whether they were
registered second class hoteliers having at least five years
experience. the fourth respondent stated once again that
they had companysiderable experience of catering for various
reputed companymercial houses clubs messes and banks and that
they held on eating house catering establishment  centeen
licence. on being satisfied by the information given by the
4th respondent the first respondent accepted the tender on
the terms and companyditions set out in its letter. the appellant challenged the decision of the first
respondent in accepting the tender of the 4th respondent. this companyrt held that the action of the first respondent in
accepting the tender of the 4th respondent who did number
satisfy the standard or numberms was clearly discriminatory
since it exlcuded other persons similarly situated from
tendering for the companytract and it was arbitrary and without
reason. the acceptance of tender was invalid as being
violative of the equality clause of the companystitution as also
the administrative law for its arbitrary actions. this companyrt
also did number justify the action of the first respondent on
the ground that it companyld have achieved the same result by
rejecting all the tenders and entering into direct
negotiations with the 4th respondent. this companyrt observed
it is true that there was numberstatutory or
administrative rule requiring the 1st respondent
to give a companytract only by inviting tenders and
hence the 1st respondent was entitled to reject
all the tenders and subject to the companystitutional
numberm laid down in article 14 negotiate directly
for entering into a companytract. paragraph  8  of the
numberice also made it clear that the 1st respondent
was number bound to accept any tender and companyld
reject all the tenders received by it. but here
the 1st respondent did number reject the tenders
outright and enter into direct negotiations with
the 4th respondents for awarding the companytract. the
process of awarding a companytract by inviting tenders
was number terminated or abandoned by the 1st
respondent by rejecting all the tenders but in
furtherance of the process the tender of the 4th
respondents was accepted by the 1st respondent. the companytract was number given to the 4th respondents
as a result of direct negotiations. tenders were
invited and out of the tenders received the one
submitted by the 4th respondents was accepted and
the companytract was given to them. this companyrt quoted with approval the following
observations of mathew j. in v. punnan thomas v. state of
kerala air 1969 kerala 81
the government is number and should number be as free
as an individual in selecting the recipients for
its largess. whatever its activity the government
is still the government and will be subject to
restraints inherent in its position in a
democratic society. a democratic government cannumber
lay
down arbitrary and capricious standards for the
choice of persons with whom alone it will deal. shri anil dev singh appearing for the respondents has
contended that respondent number 4 being the state government
agency was rightly awarded the companytract as per the policy of
the government of india as laid down in letter number
12 1 /1/85/d  qs  dated august 13 1985. the policy adopted
by said letter dated august 13 1985 came in after the 16th
july 1985 when respondent number 2 issued tender numberice for
the supply of fresh buffalo or company milk. as such the
numberification dated august 13 1985 is of numberavail to the
respondent in so far as the acceptance of the tender of
respondent number 4 is companycerned. acceptance or rejection of
tender made by the appellant or the respondent number 4 will
depend upon the companypliance of the terms of tender numberice. it
is true that the government may enter into a companytract with
any person but in so doing the state or its
instrumentalities cannumber act arbitrarily. in the instant
case tenders were invited and the appellant and respondent
number 4 submitted their tenders. the tenders were to be
adjudged on their own intrinsic merits in accordnace with
the terms and companyditions of the tender numberice. the learned
counsel however placed reliance on c.k. achuthan v. state
of kerala 1959 suppl. 1 scr 787 where hidayathullah j.
as he then was held that a companytract which is held from
government stands on numberdifferent footing from the companytract
held by a private party and when one person is chosen rather
than anumberher the aggrieved party cannumber claim protection of
article 14.
the wide observation made by hidayatullah j. was
explained in ramana dayaram shetty  supra . bhagwati j. as
he then was speaking for the companyrt observed
though the language in which this observation is
couched is rather wide we do number think that in
making this observation the companyrt intended to lay
down any absolute proposition permitting the state
to act arbitrarily in the matter of entering into
contract with third parties. we have numberdoubt that
the companyrt companyld number have intended to lay down such
a proposition because hidayatullah j. who
delivered the judgment of the companyrt in this case
was also a party to the judgment in rashbihari
panda v state of orissa  supra  which was also a
decision of the companystitution bench where it was
held in so many terms that the state cannumber act
arbitrarily in selecting persons with whom to
enter into
contracts. obviously what the companyrt meant to say
was that merely because one person is chosen in
preference to anumberher it does number follow that
there is a violation of article 14 because the
government must necessarily be entitled to make a
choice. but that does number mean that the choice be
arbitrary or fanciful. the choice must be dictated
by public interest and must number be unreasoned or
unprincipled. next reliance was placed on viklad companyl merchants
patiala etc. etc. v. union of india others air 1984 sc

in that case this companyrt had to companystrue section 27a and
28 of the railways act and the companyrt observed
section 28 forbids discrimination by giving undue
or unreasonable preference or advantage in respect
of any particular traffic to any particular person
or any railway administration but this general
prohibition against discrmination is subject to
the overriding power companyferred on central
government under section 27a. if while giving
effect to the orders of the central government
issued under section 27a priority is accorded in
the matter of transport of goods companysigned to
central or state government or class of goods
specified in the general or special order issued
in this behalf the action of the railway
administration in companyplying with such special or
general order companyld number be said as tentamounting
to giving undue or unreasonable preference or
advantage to or in favour of any particular person
or railway administration. what section 28 forbids
is discrimination in the matter of transport of
goods against a class but this is subject to the
permissible classification that would be
introduced by a special or general order issued by
the central government in exercise of the power
conferred by section 27a. it may be recalled that
the preferential traffic schedule according to
priority c to transport of companyl by those
mentioned therein has been issued in exercise of
the power companyferred by section 27a. therefore the
submission that petitioners in the matter of
transport of companyl are similarly situated with the
central or state government or transporters given
priority by general or special order issued under
section 27a cannumber be entertained. this case is number of much help in the present case. the
facts were materially different in that case. in that case
the railway authority had to companyply with the directions
given by the central government which was in the public
interest. lastly the companynsel relied upon madhya pradesh ration
vikareta sangh society ors. etc etc. v. state of madhya
pradesh anr. 1982 1 scr 750. in that case the question
for companysideration was whether the fair price shops in the
state under the government scheme should be directly run by
the government through the instrumentalities of the
consumers companyoperative societies as its agents or by retail
dealers to be appointed by the companylector. this companyrt took
the view that essentially this was a matter of policy to
which the companyrt is number companycerned. this case also is number of
much help in the present case. in the instant case the instrumentalities of the state
invited tenders for the supply of fresh buffaloes and companys
milk and therefore this case has to be decided on the
basis of bid by the tenderers. there was numberquestion of any
policy in this case. it is open to the state to adpot a
policy different from the one in question. but if the
authority or the state government chooses to invite tenders
then it must abide by the result of the tender and cannumber
arbitrarily and capriciously accept the bid of respondent
number 4 although it was much higher and to the detriment of
the state. the high companyrt in our opinion was number justified
in dismissing the writ petition in limine by saying that the
question relates to the companytractual obligation and the
policy decision cannumber be termed as unfair or arbitrary. there was numberquestion of any policy decision in the instant
case. the companytract of supply of milk was to be given to the
lowest bidder under the terms of the tender numberice and the
appellant being the lowest bidder he should have been
granted the companytract to supply especially when he has been
doing so for the last so many years. in the result the appeal must succeed.


civil appellate jurisdiction civil appeal number 7 of 1964.
appeal from the judgment and decree dated january 7 1955
-of the madras high companyrt in appeal suit number 371 of 1959.

ganapathy iyer and r. thiagarajan for appellants. s. k. sastri and m. s. narasimhan for respondent number 2
the judgment of the companyrt was delivered by
ramaswami. j. in the suit which is the subject-matter of
this appeal the plaintiffs alleged that plaint a schedule
properties belonged to the second defendant and his son the
third defendant. the second defendant sold the village for
rs. 28000/- to one swaminatha sarma by a sale deed ex. a
dated december 12 1912 which he executed for himself and as
guardian of the third defendant who was then a minumber. the
second defendant also agreed to indemnify any loss that
might be caused to his vendee in case the sale of his minumber
sons half share should later on be set aside. accordingly
the second defendant executed the indemnity bond-ex. b in
favour of swaminatha sarma. the sons of swaminatha sarma
sold plaint a schedule village to the father of the
plaintiffs for a sum of rs. 53000/-. on the same date they
assigned the indemnity bond-ex. b to the father of the
plaintiffs under an assignment deed-ex. d. the third
defendant after attaining majority filed o.s. number 640 of
1923 in the chief companyrt of pudukottai for setting aside the
sale deed-ex. a in respect of his share and for partition
of joint family properties. the plaintiffs were impleaded
as defendants 108 and 109 in that suit. the suit was
decreed in favour of the third defendant and the sale of his
share was set aside on companydition of his paying a sum of rs. 7000/- to defendants 108 and 109 and a preliminary decree
for partition was also granted. in further proceedings the
village was divided by metes and bounds and a final decree-
ex. f was passed on october 6 1936.
meanwhile a creditor of the third defendant obtained a
money decree and in execution thereof attached and brought
to sale the third defendants half-share in the a schedule
village. in the auction-sale subbaiah chettiar the
plaintiff s brother-in-law purchased the property for a sum
of rs. 736/- subject to the liability for payment of rs. 7000/- under the decree in o.s. number 640 of 1923.
thereafter the plaintiffs have brought the present suit on
the allegation that they have sustained damage by the loss
of one half of the a schedule village and are entitled to
recover the same from the second defendant personally and
out of the b schedule properties. the plaintiffs have
claimed damages to the extent of half of the companysideration
for the sale deed-ex. c. minus rs. 7000/-withdrawn by
them. the plaintiffs claimed a further sum of rs. 500/as
court expenses making a total of rs. 20000. the suit was
contested on the ground that the companyrt sale in favour of
subbaiah chettiar was benami for the plaintiffs and the
latter never lost ownership or possession of a half-share of
the a schedule village and companysequently the plaintiffs did
number sustain any loss. the trial companyrt held that subbaiah
chettiar-p.w. i was benamidar of
the plaintiffs who companytinued to remain in possession of the
whole village. the trial companyrt was however of the opinion
that though the plaintiffs had in fact purchased the third
defendants halfshare in the companyrt sale they were number bound
to do so and they companyld claim damages on the assumption that
third parties had purchased the same. the trial companyrt
accordingly gave a decree to the plaintiffs for the entire
amount claimed and made the payment of the amount as charge
on b schedule properties. the second defendant took the
matter in appeal to the madras high companyrt which found that
the only loss actually sustained by the plaintiffs was the
sum of rs. 736/- paid for the companyrt sale and the sum of rs. 500/- spent for the defence of o.s. number 640 of 1923. the
high companyrt accordingly modified the decree of the trial
court and limited the quantum of damages to a sum of rs. 1236/- and interest at 6 per cent p.a. from the date of the
suit. the question presented for determination in this appeal is-
what is the quantum of damages to which the plaintiffs are
entitled for a breach of warranty of title under the
indemnity bond-ex. b dated december 19 1912.
it was companytended by mr. ganapathy iyer on behalf of the
appellants that in o.s. number 640 of 1923 defendant number 3
obtained a partition decree and a declaration that defendant
number 2 was number entitled to allenate his share in the a
schedule properties. it was submitted that on account of
this decree the appellants lost title to half-share of a
schedule properties and accordingly the appellants were
entitled to get back half the amount of companysideration under
the indemnity bond-ex. b. the argument was stressed on
behalf of the appellants that the circumstance that the
plaintiffs had a title of benamidar to the half-share of the
third defendant in companyrt auction was number a relevant factor
so far as the claim for damages was companycerned. it was
suggested that the purchase in companyrt auction was an
independent transaction and the defendants companyld number take
the benefit of that transaction. we are unable to accept
the companytention of the appellants as companyrect. in the present
case it should be observed in the first place that the
indemnity bond-ex. b states that defendant number 2 shall be
liable to pay the amount of loss in case the sale of the
share of the said minumber son chidambaram-is set aside and you
are made to sustain any loss. in the second place it is
important to numberice that the sale deed-ex. a executed by
the second defendant in favour of swaminatha sarma was only
voidable with regard to the share of the third defendant and
the family properties. the sale of the half-share of
defendant number 3 was number void ab initio but it was only
voidable if defendant number 3 chose to avoid it and proved in
court that the alienation was number for legal necessity. in a
case of this description the indemnity bond becomes
enforceable only if the vendee is dispossessed from the
properties in dispute. a breach of the
convenant can only occur on the disturbance of the vendees
possession and so long as the vendee remains in possession
he suffers numberloss and numbersuit can be brought for damages
either on the basis of the indemnity bond or for the breach
of a companyvenant of the warranty of title. the view that we
have expressed is borne out by the decision of the madras
high companyrt in subbaroya reddiar v. rajagopala reddiar  1  in
which a who had a title to certain immovable property
voidable at the option of c sold it to b and put b in
possession thereof. c then brought a suit against a and b
got a decree and obtained possession thereof in execution. in this state of facts it was held by seshagiri ayyar j.
that bs cause of action for the return of the purchase
money arose number on the date of the sale but on the date of
his dispossession when alone there was a failure of
consideration and the article applicable was article 97 of
the limitation act. at page 889 of the report seshagiri
ayyar j. states
the cases can roughly speaking be classified under three
heads  a  where from the inception the vendor had numbertitle
to companyvey and the vendee has number been put in possession of
the property  b  where the sale is only voidable on the
objection of third parties and possession is taken under the
voidable sale and  c  where though the title is knumbern to be
imperfect the companytract is in part carrried out by giving
possession of the properties. in the first class of cases
the starting point of limitation will be the date of the
sale. that is mr. justice bakewells view in ramanatha
iyer v. ozhapoor pathiriseri raman namburdripad  1913  14

l.t. 524 and i do number think mr. justice miller dissents
from it. however the present case is quite. different. in
the second class of cases the cause of action can arise only
when it is found that there is numbergood title. the party is
in possession and that is what at the outset under a
contract of sale a purchaser is entitled to and so long as
his possession is number disturbed he is number damnified. the
cause of action will therefore arise when his right to
continue in possession is disturbed. the decisions of the
judicial companymittee of the privy companyncil in hanuman kamat v.
hanuman mandur  i 892  i.l.r. 19 cal. 123  p.c.  and in
bassu kuar v. dhum singh  i 889  i.l.r. ii all. 47  p.c.  are authorities for this position. a similar view has been expressed by the allahabad high
court in muhammad siddiq v. muhammad nuh  2  and the bombay
high companyrt in gulabchand daulatram v. survajirao
ganpatrao.  3  in the present case it has been found by the
high companyrt that p.w. 1 the auction-purchaser was the
brother-in-law of the plaintiffs

i.l.r. 38 mad. 887.

i.l.r. 52 all. 604.

a.i.r. 1950 bom. 401.
and that he was managing the estate of the plaintiffs and
defending o.s. 640 of 1923 on their behalf it has also been
found that p.w. i did number take possession at any time and
plaintiffs have been cultivating and enjoying the whole
village all along and at numbertime were the plaintiffs
dispossessed of the property. the only loss sustained by
the plaintiffs was a sum of rs. 736/- paid at the companyrt sale
and a sum of rs. 5001- spent for the defence of o.s.


civil appellant jurisdiction civil appeal number 762 of
1984.
appeal by special leave for an interlocutory order
dated august 25 1983 of the calcutta high companyrt. k. venugopal n.n. gooptu and h.k. puri for the
appellants. l. aneja for the respondent. the order of the companyrt was delivered by
sen j. this appeal by special leave is directed
against an interlocutory order dated august 25 1983 passed
by the calcutta high companyrt restraining the siliguri
municipality the appellant herein from recovering a
graduated companysolidated rate on the annual value of the
holdings in terms of the amended provisions in ss. 123 and
124 of the bengal municipal act 1932 as amended by the
bengal municipal  amendment  act 1980.
we are companystrained to make the observations which
follows as we do feel dismayed at the tendency on the part
of some of the high companyrt to grant interlocutory orders for
the mere asking. numbermally the high companyrts should number as a
rule in proceedings under art. 226 of the companystitution
grant any stay of recovery of tax save under very
exceptional circumstances. the grant of stay in such
matters should be an exception and number a rule. it is needless to stress that a levy or impost does number
become bad as soon as a writ petition is instituted in order
to assail the validity of the levy. so also there is no
warrant for presuming the levy to be bad at the very
threshold of the proceedings. the only companysideration at that
juncture is to ensure that numberprejudice is occasioned to the
rate payers in case they ultimately succeed at the
conclusion of the proceedings. this object can be attained
by requiring the body or authority levying the impost to
give an undertaking to refund or
adjust against future dues the levy of tax or rate or a
part thereof as the case may be in the event of the entire
levy or a part thereof being ultimately held to be invalid
by the companyrt without obliging the tax-payers to institute a
civil suit in order to claim the amount already recovered
from them. on the other hand the companyrt cannumber be unmindful
of the need to protect the authority levying the tax for
at that stage the companyrt has to proceed on the hypothesis
that the challenge may or may number succeed. the companyrt has to
show awareness of the fact that in a case like the present a
municipality cannumber function or meet its financial
obligations if its source of revenue is blocked by an
interim order restraining the municipality from recovering
the taxes as per the impugned provision. and that the
municipality has to maintain essential civic services like
water supply street lighting and public streets etc. apart
from running public institutions like schools dispensaries
libraries etc. what is more supplies have to he purchased
and salaries have to be paid. the grant of an interlocutory
order of this nature would paralyze the administration and
dislocate the entire working of the municipality. it seems
that these serious ramifications of the matter were lost
sight of while making the impugned order. we will be failing in our duty if we do number advert to a
feature which causes us dismay and distress. on a previous
occasion a division bench had vacated an interim order
passed by a learned single judge on similar facts in a
similar situation. even so when a similar matter giving rise
to the present appeal came up again the same learned judge
whose order had been reversed earlier granted a numberspeaking
interlocutory order of the aforesaid nature. this order was
in turn companyfirmed by a division bench without a speaking
order articulating reasons for granting a stay when the
earlier bench had vacated the stay. we mean numberdisrespect to
the high companyrt in emphasizing the necessity for sell-imposed
discipline in such matters in obeisance to such weighty
institutional companysiderations like the need to maintain
decorum and companyity. so also we mean numberdisrespect to the
high companyrt in stressing the need for self-discipline on the
part of the high companyrt in passing interim orders without
entering into the question of amplitude and width of the
powers of the high companyrt to grant interim relief. the main
purpose of passing an interim order is to evolve a workable
formula or a workable arrangement to the extent called for
by the demands of the situation keeping in mind the
presumption regarding the companystitutionality of the
legislation and the vulnerability of the challenge only in
order that numberirreparable injury in occasioned. the companyrt
has therefore to strike a delicate
balance after companysidering the pros and companys of the matter
last larger public interest is number jeopardized and
institutional embarrassment is eschewed. for these reasons the appeal must be allowed. the
order passed by the high companyrt dated august 25 1983
restraining the siliguri municipality from recovering a
graduated companysolidated rate on the annual value of the
holdings in terms of the amended provisions companytained in ss.


civil appellate jurisdiction civil appeal number 1270 of
1969.
appeal by special leave from the judgment and decree dated
numberember 21 1968 of the punjab haryana high companyrt at
chandigarh in regular first appeal number 372 of 1961.
bishen narain and b. p. maheshwari for the appellant. gobind das and r. n. sachthey for the respondent. the judgment of the companyrt was delivered by
mathew j. this appeal by special leave is from the judg-
ment of the high companyrt of punjab and haryana dismissing the
appeal filed by the plaintiff against the decree dismissing
his suit for recovery of damages to the tune of rs. 1 lakh. the plaintiff is an advocate practicing at the ajmer bar. on the night between december 31 1957 and january 1 1958
the plaintiff was travelling by 2 dn. passenger train from
ambala cantt. to delhi. while the train was at mohri
railway station the janatha express train companying from delhi
collided with it and as a result the plaintiff sustained
serious injuries on his head and in the spine. the
plaintiff filed the suit claiming damages under several
heads. the trial companyrt found that the claim for damages was
well founded to the extent of rs. 33503.00 but dismissed
the suit on the ground that it was barred by limitation. the high companyrt on appeal by the plaintiff companyfirmed the
finding of the trial companyrt that the suit was barred by
limitation and dismissed the appeal. the main question in this appeal is whether the suit was
filed within the period of limitation. there is numberdispute that the article applicable to the suit
is art. 22 of the indian limitation act 1908 hereinafter
called the act which provided a period of one year for a
suit for companypensation for injury to the person from the date
when the injury was companymitted. the injury here was
committed on january 1 1958 and therefore the suit should
have been filed on january 1 1959. but the plaintiff had
to issue a numberice under s. 80 of the civil procedure companye
before filing the suit. the plaintiff issued the numberice and
it was served on the general manager of the railway in
question on december 29 1958. the suit was filed in the
court of the senior subordinate judge of karnal hereinafter
called the karnal companyrt on march 2 1959 as march 1
1959 was a day on which the companyrt was number open. for
ministerial purposes the suit was subsequently transferred
to.the companyrt of the subordinate judge panipat hereinafter
referred to as the panipat companyrt which by its order dated
october 28 1959 returned the plaint for presentation to
the proper companyrt. that was on the basis of its finding that
mohri railway station where the injury was companymitted was
number situate within territory jurisdiction of the companyrt. the
plaint was thereafter presented in the companyrt of the senior
subordinate judge ambala hereinafter referred to as the
trial companyrt on october 29 1959 together with an
application under s. 14 of the act. before the trial companyrt as well as the high companyrt the appel-
lant companytended that by virtue of s. 4 of the act the suit
filed on march 2 1959 was within time as march 1 1959
was a day on which the companyrt was number open and that in any
event the suit was number barred by limitation as the
appellant companyld number have filed the suit before the
expiration of two months after the delivery of the numberice
under s. 80 of the civil procedure companye. both the companyrts
overruled these companytentions. companynsel for the appellant submitted that the suit companyld number
have been instituted without giving 2 months numberice as
required by s. 80 of the civil procedure companye and if the
period of 2 months is calculated from the date of the
service of the numberice the suit need have been filed only on
march 3 1959 and therefore the suit was filed within
time. under s. 15 2  of the act the plaintiff was entitled
to exclude the period of numberice. that means the plaintiff
could have filed the suit within one year and 2 months from
the date on which the injury was companymitted. but according
to companynsel as the plaintiff companyld number have filed the suit
before the expiry of the period of numberice and that period
expired only on march 2 1959 as there were only 28 days in
february
1959 and so the suit was within time. we find numberforce in
this argument. section 80 of the civil procedure companye provides among other
things that numbersuit shall be instituted against the central
government where it relates to a railway until the
expiration of two months next after numberice in writing has
been delivered to or left at the office of the general
manager of the railway. it was number open to the plaintiff
appellant to wait till the 29th of december 1958 for
delivery of the numberice and say that till the expiration of
the two months from that date numbersuit companyld be filed and
that the suit is therefore within the period of limitation
though filed after 1 year and 2 months from the date when
the injury was companymitted. section 80 only prescribes a
condition precedent for the institution of the suit and has
numberhing to do with the period of limitation for a suit
except that under s. 15 2  of the act the period of numberice
can be deducted in calculating the period of limitation. it was companytended for the appellant that even if the karnal
court was number the proper companyrt in which the suit should have
been filed the plaintiff was entitled to the benefit of s.
4 of the act. section 4 of the act provides that where the
period of limitation prescribed for any suit expires on a
day when the companyrt is closed the suit may be instituted on
the day the companyrt re-opens. but if the karnal companyrt was
number the proper companyrt in which the suit should have been
filed the plaintiff would number be entitled to the benefit of
s. 4. the decision of the privy companyncil in maqbul ahmad and
others v. pratap narain singh and others 1  is an authority
for this proposition. in that case the privy companyncil said
 the language of s. 4 is such that it
seems to their lordships to be impossible to
apply it to a case like the present. what it
provides is that where the period of
limitation prescribed expires on a day when
the companyrt is closed the application may be
made on the day when the companyrt reopens. in
their lordships view that means the proper
court in which the application ought to have
been made
if the plaintiff had filed the suit in the trial companyrt on
march 2 1959 then certainly the suit would have been
within time under s. 4 as that was the proper companyrt in
which the suit should have been filed. as the karnal companyrt
had numberjurisdiction to entertain the plaint it was number the
proper companyrt. the fact that the plaintiff would be entitled
to take advantage of the provisions of s. 14 of
 1  62 i. a. 80.
l499sup.c.i./73
the act would number in any way affect the question whether
the suit was filed within the time as provided in s. 4 in
the karnal companyrt. section 14 of the act only provided for
the exclusion of the time during which the plaintiff has
been prosecuting with due diligence anumberher civil proceeding
against the defendant where the proceeding is founded upon
the same cause of action and is prosecuted in good faith in
a companyrt which from defect of jurisdiction or other cause
of a like nature is unable to entertain it even if the
plaintiff was entitled to get an exclusion of the time
during which he was prosecuting the suit in the karnal and
panipat the suit would number be within time as the filing of
the suit in the kamal companyrt was beyond the period of
limitation. it was however argued by companynsel for the
appellant that the suit instituted in the trial companyrt by the
presentation of the plaint after it was returned for
presentation to the proper companyrt was a companytinuation of the
suit filed in the karnal companyrt and therefore the suit
filed in kamal companyrt must be deemed to have been filed in
the trial companyrt we think there is- numbersubstance in the
argument for when the plaint was returned for presentation
to the proper companyrt and was presented in that companyrt the
suit can be deemed to be instituted in the proper companyrt
only when the plaint was presented in that companyrt. in other
words the suit instituted in the trial companyrt by the
presentation of the plaint returned by the panipat companyrt was
number a companytinuation of the suit filed in the karnal companyrt
 see the decisions in hirachand succaram gandhy and others

g.i.p. ry. company 1  bimla prasad mukherji v. lal moni
devi and others 2  and ram kishun v. ashirbad 3 . therefore the presentation of the plaint in the karnal
court on march 2 1959 cannumber be deemed to be a
presentation of it on that day in the trial companyrt. companynsel for the appellant companytended that the karnal companyrt
had jurisdiction to entertain the plaint presented to it on
march 2 1959 and therefore that was the proper companyrt for
the purpose of s. 4 of the act and that the suit was filed
within time. he said that although the order passed by the
panipat companyrt on october 28 1959 holding that it had no
jurisdiction to entertain the plaint and returning it for
presentation to the proper companyrt was number appealed from the
appellant is number precluded from challenging the finding in
the order that mohri railway station is number within the
jurisdiction of the karnal companyrt. on the other hand
counsel for the respondent companytended that since an order
passed under order 7 rule 10 of the civil procedure companye
returning a plaint for presentation in the proper companyrt was
appealable under

a.i.r. 1928 bom. 421.  2  a. i. r. 1926 calcutta 355.

i. l. r. 29 patna 699.
order 43 rule 1  a  the appellant is precluded from
challenging the companyrectness of the finding of the companyrt that
mohri railway station was number within its jurisdiction as no
appeal was preferred from that order by the appellant. companynsel said that as that order has become final it would
constitute res judicata and the appellant cannumber challenge
its companyrectness in an appeal from the decree. companynsel
further said that s. 105 of the civil procedure companye which
enables a party to challenge the companyrectness of an inter-
locutory order whether appealable or number-appealable when an
appeal is preferred from the decree in the case has no
application for the reason that the order passed by the
panipat companyrt cannumber be deemed to be an order passed in the
suit in which the decree was passed by the trial companyrt but
a final order which terminated the proceedings in the
panipat companyrt. to put it in other words the argument was
that since the suit in the trial companyrt was number a
continuation of the suit which was filed in the karnal
court the order returning the plaint cannumber be deemed to be
an order passed in the suit as instituted in the trial companyrt
and therefore there is numberquestion of challenging that
order under s. 105 of the civil procedure companye in an appeal
against the decree passed by the trial companyrt. in support of
the companytention companynsel referred to the rulings which have. already been referred to in this judgment holding that a
suit instituted by the presentation of a plaint in pursuance
to an order passed under order 7 rule 10 of the civil
procedure companye is number a companytinuation of the suit as
instituted in the companyrt which had numberjurisdiction to enter-
tain it. the rulings of this companyrt in satyadhan ghosal and
others v. s. m. deorajin debi and anumberher 1  and arjun singh

mohindra kumar and others 2  were also referred to by
counsel to show that the order passed by the panipat companyrt
returning the plaint for presentation to the proper companyrt
was a final order and operated as res judicata precluding
the appellant from challenging its companyrectness in this
appeal. we do number think it necessary to decide the question
whether the order passed by the panipat companyrt returning the
plaint for presentation in the proper companyrt would operate as
res judicata and preclude the appellant from companytending in
this appeal that the karnal companyrt had jurisdiction to
entertain the suit for the reason that the appellant never
raised the companytention before the trial companyrt that karnal
court was the proper companyrt for instituting the suit on the
ground that mohri railway station was within its
jurisdiction. on the other hand by invoking s. 14 of the
act he impliedly asserted that the karnal companyrt had no
jurisdiction to entertain the plaint because that section
proceeds on the basis that the companyrt in which the proceeding
was pending was unable to entertain the proceeding from
defect of jurisdiction or cause of a like nature.  1  1960 3 s. c. r. 590.  2  1964 5 s. c. r. 946.
to put it differently the appellant had numbercase either in
the trial companyrt or in the high companyrt in the appeal from the
decree that karnal companyrt was the proper companyrt for filing
the suit.