Executive Officer, Notified Area Council and anr. Vs. PrabIn Kumar Mohania Alias Mohanlal and anr. - Court Judgment

A. Pasayat, J.

1. The respondents suit for injunction in respect of allotment of a room, and for payment of compensation by way of damages having been accepted so far as the prayer relating to injunction is concerned, this appeal under Section 100 of the Code of Civil Procedure, 1908 (in short, the 'Code') has been filed.

2. Factual position essentially is not disputed. Filtering out unnecessary details, it is to the following effect.

Plaintiffs version is that they are partners of a registered partnership firm styled M/s. Orissa Cloth Store, Bhadrak Notified Area Council (hereinafter referred to as the 'Council') started construction of six rooms in front of the Lokanath Temple within the Notified Area. It was completed in March, 1978, and was available to be let out. Plaintiffs applied for taking one of the rooms on rent, and en order of allotment relating to room No. 1 was issued with a direction to deposit Rs. 1,000/- as security and a further sum of Rs. 1,000/- as advance, with further direction to execute an agreement with the Executive Officer of the Council on 4-7-1978. The order of allotment dated 28-6-1978 was communicated to the plaintiffs on the same day. They sent a letter on 1-7-19 78 along with a banker's cheque for Rs. 2.000/- by registered post to the Executive Officer of the Council which was refused to be accepted by the latter, and the agreement was not executed notwithstanding presence of one of the plaintiffs (plaintiff No. 2) for execution of the same as the Executive Officer did not take any steps. The plaintiffs have satisfied their part of the obligation and contract, as evident from the order of allotment and the same being a completed one was enforceable. When the plaintiffs learnt that the room was allotted in favour of Bhadrak Wholesale Co-operative Society, they filed the suit. The defendants-appellants herein took a stand that the order of allotment was provisional and the contract was not complete because the conditions which were to be satisfied were not so done. According to him, no banker's cheque was in fact sent or received, and therefore, question of the plaintiffs having any grievance does not arise. Additionally it is submitted that the suit was not maintainable in absence of notice under Section 349 of the Orissa Municipal Act, 1950 (in short, the 'Act').

3. The learned Munsif, Bhadrak as well as the learned Subordinate Judge. Bhadrak accepted the plaintiffs plea and held that (a) there was a completed agreement which was enforceable and (b) there was no necessity of complying with provisions of Section 349 of the Act. However, the prayer for damages was turned down. It is to be noted at this juncture that the Courts below relied on a decision of the apex Court in Jawharlal Burman v. Union of India : AIR 1962 SC 372 to hold that the contract was completed one and the requirement of deposit of security money, advance money and signing of agreement constituted conditions subsequent and not conditions precedent to the contract.

4. Mr. S.N. Sinha, learned counsel for the appellant urged that the Courts below have lost sight of certain relevant aspects. They have misinterpreted the ratio of the decision in Jawharlal Burman's case (supra). A bare look at the order of allotment (Ext. 1) shows that it was a provisional one and not the final one. The Courts below have come to presumptuous conclusion about the despatch of the banker's cheque. Reference is made to the evidence of PW 1. who has stated that the registered letter (Ext. 3) when opened in Court was found to contain carbon copy of the letter purported to have been addressed to the Executive Officer. This is stated to be sufficient to show that the banker's cheque was not sent. Even if it is accepted that the banker's cheque was obtained by the plaintiffs, that is not the same as the despatch of the cheque to the Council or the Executive Officer. There is no definite material about despatch. Additionally it is submitted that the Courts below have lost sight of Section 127 of the Act, and therefore, have erroneously held that Section 349 has no application.

5. Mr. R.K. Mohapatra, learned counsel for the plaintiffs-respondents, however, submitted that the appeal being under Section 100 of the Code there is no scope for re-appraisal of evidence. Courts below on elaborate analysis of evidence have adapted the plea of despatch of banker's cheque by the plaintiffs. There is no material brought on record by the defendants to show that there was no despatch. Postal endorsement on the registered letter being that it was refused on 5-7-1978, a presumption under Section 114 of the Indian Evidence Act, 1872 (in short, the 'Evidence Act') was available to be drawn and view of unchallenged evidence that plaintiff No. 2 was present in the office of the Executive Officer on 4-7-1978. Courts below have rightly held that the plaintiffs are to succeed. Relying on the observations made by the apex Court in Jawharlal's case (supra), It is submitted that the contract was a completed one and it was enforceable, and therefore, even if the agreement was not executed, that is of no consequence. So far as evidence of PW .1 to the effect that the registered cover did not contain the cheque when it was opened is concerned, it is submitted that it is of no consequence. There was no specific material brought by the defendant before the Courts below to show that the registered cover did not contain the banker's cheque, and as rightly observed by the Courts below the plaintiffs were not expected to wait for four years allowing the value of the banker's cheque to go dawn after refusal was made by defendant No. 1 to receive the registered envelope containing the banker's cheque. So far as application of Section 349 of the Municipal Act is concerned, it is submitted that in a suit of this nature (essentially for injunction) there is no scope for reference to Section 349. In support of this submission strong reliance is placed on a decision of this Court in Salim Mohammed and Ors. v. The Cuttack Municipality and Ors. : 15 (1949) CLT 39. It is also submitted that the conclusions being essentially factual there is no scope for interference in this appeal under Section 100 of the Code.

6. Certain interesting features are to be noted in this case. Though it is trite, that the conclusions arrived at on factual aspects are not to be interfered with in an appeal under Section 100 of the Code, where the lower Courts have acted on presumptions or have arrived at conclusions which are not available to be drawn on the materials on record, or are perverse, the High Court can interfere under Section 100 of the Code. A finding of fact can be set aside in second appeal (a) where it is not based on any evidence or on legal evidence or on a judicial consideration of evidence adduced; (b) where the evidence is disbelived for no reason, (c) where it is based on a misconception of the real point in controversy in the case; (d) where the conclusion of fact is not warranted by the facts on which it is based or is inconsistent with other findings in the case or is opposed to the case set up by the party in whose favour it is drawn or is contrary to pleadings and evidence in the case; (e) where it is contrary, to the facts found or is inconsistent with the statement of reasons therefor in the judgment or is based on quaint reasoning, or is vague or indefinite or ambiguous: (f) where it is arbitrary or vitiated by prejudices or is based on a distorted view of the evidence or is based on surmises or extraneous considerations, or where no reasons have been given for the finding; (g) where material facts or evidence have been ignored in arriving at the conclusions of fact and (h) where finding is perverse in the sense that no normal person could have arrived at that finding. Additionally wrong interpretation of a document makes out of case for interference.

7. Coming to the facts of the case. I find that the first aspect is to see whether the order of allotment is provisional or final. Following portion of the said order of. allotment is relevant.

'This is to inform you that room No. 1 (one) constructed in front of Lokanath temple is provisionally allotted to you. You are hereby directed to deposit Rs. 1,000/- (Rupees one thousand) towards security deposit and Rs. 1,000/- (Rupees one thousand) towards advance and to execute agreement with the undersigned by 4-7-1978 failing which your allotment ' will stand cancelled.

XXX XXX XXX You will be allowed to physically occupy the allotted room only after you furnish the required security deposit, advance money and execute the agreement.

As mentioned above, the present order is a provisional allotment order in your favour. Final allotment order will be issued in your favour after you fulfil conditions mentioned in paras 1 and 2....... '

The requirements cannot be construed to be condition subsequent, and not condition precedent to the contract. In Jawharlal's case (supra) in paragraph 16 it has been held by the apex Court that Section 7 of the Indian Contract Act 1872 requires that the acceptance of the offer must be absolute and unqualified, and it cannot be conditional. On the facts of that case, in view of specific mention in the offer letter that there was a final contract, the apex Court held that the contract was a completed one. The facts of that case are clearly distinguishable from one at hand. The extracted portions more particularly, the underlined portions show that the deposits, of security deposit and the advance were conditions precedent and not subsequent. Added to that, the requirement was that the deposit was to be made by 4-7-1978, and the agreement was to be executed that day. Evan accepting that the banker's cheque was despatched on 1-7-1978. refusal to receive the letter as evident from the endorsement was on 5-7-1978. Soon 4-7-1978 there was no deposit of security deposit and the advance. Courts below more particularly the appellate Court proceeded on the erroneous premises that refusal was made both on 4-7-1978 and 5-7-1978. Ext. 2, the postal cover clearly shows that the endorsement on 4-7-1978 was one of absence.

8. Coming to the question whether the banker's cheque was sent as claimed, the evidence of P.W. 1 is very revealing. He has stated that when the registered cover was opened only a copy of the letter addressed to the Executive Officer was found. It is not the case of the plaintiffs that the registered cover which was refused was opened prior to its opening in Court. If it was opened earlier, question of opening it again in Court did not arise. The Courts below have come to peculiar finding that the plaintiffs could not have waited for encashment of the banker's cheque after it was refused to be accepted by the Executive Officer. That does not explain the evidence of PW 1 to the effect-that the registered cover was opened in Court for the first time after it was refused to be accepted. It was not his statement that the letter was earlier opened and the banker's cheque was taken out. Though there can be. no doubt that a banker's cheque was obtained, there is no definite material about its despatch to the Executive Officer. Had the concerned envelope (Ext. 2) been opened for the first time in the Court and contained a banker's cheque, it would have gone a long way to substantiate the plea of despatch. Therefore, there was no definite material abut despatch of the banker's cheque to the Executive Officer. The Courts below have arrived at presumptuous conclusion without any material whatsoever to substantiate it. They have proceeded on the presumption that, a person obtaining the banker's cheque is normally expected to send it. The plaintiffs having failed to explain why the envelope when opened in Court did not contain the banker's cheque, cannot take advantage of a presumption. The irresistible conclusion is that the plaintiffs have failed to prove despatch of the banker's cheque to the Executive Officer, and in any event the security deposit and the advance deposit having not been made by 4-7-1978 the allotment stood cancelled in terms of the provisional allotment order (Ext. 1). The Courts below were not justified in concluding that the contract was a completed one and granting relief to the plaintiffs.

9. In view of the aforesaid, it is really not necessary to deal with the question whether notice under Section 349 of the Act was necessary. But in view of the importance of the question, I shall deal with that aspect. The said provision so far as relevant reads as follows:

'349. Notice of action against municipal council.

(1) No suit or other legal proceeding, shall be brought against any municipal councilor, the Chairman, Executive Officer, any councilor, officer or servant, in respect of any act done or purporting to be done in execution or intended execution of this Act or any rule, regulations, bye-law, or order made under it or in respect of any alleged neglect or default in the execution of this Act or any such rule, regulations, bye-law or order, until the expiration of two months next after notice in writing stating the cause of action, the nature of the relief sought, the amount of compensation claimed, and name and place of residence of the intended plaintiff, has been left at the office of the municipal council, and if the proceeding is intended to be brought against any such Chairman, Executive Officer, Councilor, Officer, servant or person, also delivered to him, or left at his place of residence. And unless, such notice be proved, the Court shall find for the defendant. (2) to (4) xxx xxx xxx.'

A bare reading of Section 349 (1) of the Act makes it clear that requirement of notice of a contemplated suit was applicable only in those cases where plaintiff claimed damages or compensation, or in respect of acts done in execution or intended execution of the provisions of the Act, Rules, Regulations, Bye-laws or order made under it. Courts below have proceeded on the basis that construction, of rooms and leasing them out and dealing with the matter in the manner done has no nexus with any act requiring prior notice. Learned counsel for the appellants placed reliance on-Section 127 of the Act to label the conclusion indefensible. The said provision deals with power to purchase, lease or sell lands. Respondents' stand is that Section 127 has no application. It is not the case of the respondents that the N.A.C. had no jurisdiction to lease out the property. Otherwise, it could not have claimed any relief in respect of the property.

Section 349 of the Act in its operation-is akin to Section 80 of the Code. Respondents stand is that it has no application to suits for injunction. The foundation for this plea is the observations of this Court in Salim Mohammed's case (supra). It is to be noted that Sub- Section (2) has been inserted in Section 80 of the Cods by Act 104 of 1976 [the CPC (Amendment) Act, 1976]. In order to mitigate the rigours of Sub-section (1) of Section 80 and to enable a person to seek urgent and immediate relief against the Government or a Public Officer the provision of Sub-section (2) was inserted. While making a relaxation for entertaining a suit for injunction without a notice under Section 80(1), legislature has made it amply clear that no relief by interim order in such a suit can be granted without service of notice to the State or a Public Officer concerned. Provisions of Section 80 are mandatory in nature. Its terms are imperative and admit of no exception or implication. The section is applicable to all forms of action including those in which the whole or the part of relief claimed is an injunction. (See Sawai Singhai Nirmal Chand v. The Union of India : AIR 1966 SC 1068, at 1071). A suit not complying with its provision cannot be entertained by any Court and if instituted must be rejected under order 7, Rule 11 of the Code. The same principles apply in respect of cases to which Section 349 of the Act apply. it is relevant to note that there is no provision parallel to Sea. 80 (2) of the Code in Section 349 of the Act. In view of the decision of the apex Court in Sawai Singhai Nirmal Chand's case (supra), the contrary view of this Court expressed in Salim Mohammed's case (supra) is of no consequence. Without requisite notice under Section 349 of the Act, the suit is not maintainable.

10. The Second Appeal is allowed, judgments and decrees of the Courts below are set aside, and the suit is dismissed, but there shall be no order as to costs.