State of Madras vs C.P. Agencies and Anr.

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 25 August 1959

Coram: S.K. Das, M. Hidayatullah

The State of Madras versus C.P. Agencies and Another was decided on 25 August 1959 by the Supreme Court of India. The judgment was delivered by Chief Justice Das, with the bench consisting of Justice S.K. Das and Justice M. Hidayatullah. The appeal was entertained on a special leave basis. The sole point of controversy in this appeal concerned the validity of a notice of suit issued under Section 80 of the Code of Civil Procedure. The notice had been served by the plaintiff, who was the first respondent before the Court, upon the first defendant, who was the appellant. The Court examined the language of Section 80 and observed, following the earlier pronouncement of the Judicial Committee in Bhagchand Dagdusa v. Secretary of State, that the provision is expressed in clear, explicit and mandatory terms and admits no implied exceptions. Section 80 unambiguously commands that no suit may be instituted against the Government or a public officer for acts done in official capacity until a period of two months has elapsed after a notice is served in the prescribed manner. The notice must set out the cause of action, the plaintiff’s name, description and residence, and the relief claimed. The Court noted that there was no dispute that the plaintiff’s name, description, residence and the reliefs sought had been adequately stated in the notice. The only remaining issue was whether the cause of action had also been set out. Both lower courts had held that the notice satisfied this requirement, and the Court recorded that fact.

The Court explained that the purpose of Section 80 is plainly to give the Government or the public officer sufficient advance notice of the case that is intended to be brought against him, so that he may assess the situation and decide whether to accept or resist the claim. To enable such a decision, it is necessary for the notice to convey the nature of the proposed suit, the factual basis of the claim, and the precise reliefs sought. While the reliefs had already been clearly articulated, the determination of whether the cause of action was adequately described depended on the interpretation of the notice issued under Section 80. Consequently, the Court found it unnecessary to refer to earlier decisions that dealt with the identity of the person issuing the notice and the identity of the plaintiff in multiple suits, such as Vellayan Chettiar v. Government of Madras and Government of the Province of Bombay v. Pestonji Ardeshir Wadia. The Court therefore focused solely on the sufficiency of the cause of action as presented in the notice.

In examining the condition for the applicability of Order II, Rule 2 of the Code of Civil Procedure, the Court referred to the authority in Mohammad Khalil, Khan v. Mahbub Ali Mian. The Court also relied on the well-known observations of Brett J. in Cooke v. Gill (1873) 8 CP 107 and on the definition of “cause of action” given in Read v. Brown (1888) 22 QBD 128, both of which are cited in 75 Ind App 121. Lord Esher M. R. defined a cause of action as every fact that the plaintiff must prove, if contested, in order to obtain the judgment of the court. He explained that the definition does not include every piece of evidence required to prove each fact, but only the facts themselves that must be established. Fry L. J. concurred, stating that any fact which, if not proved, gives the defendant an immediate right to judgment must be part of the cause of action. Similar reasoning was expressed by Lopes L. J. in Mst. Chand Kour v. Partab Singh, 15 Ind App 156. Lord Watson added that the cause of action is unrelated to any defence that the defendant may raise and does not depend on the character of the relief claimed by the plaintiff. He said that it refers solely to the grounds set out in the plaint, that is, the basis on which the plaintiff asks the court to decide in his favour. Having clarified the meaning of “cause of action,” the Court proceeded to examine whether the cause of action relied upon by the plaintiff was adequately stated in the notice issued under Section 80. For that purpose the Court first identified the cause of action as set out in the plaint. The plaint stated that the second defendant acted as Assistant Marketing Officer of the first defendant, the Madras Government, and possessed full authority to purchase goods on its behalf. It further alleged that in 1945 the first defendant bought black gram from the plaintiff through the second defendant at rates agreed between the parties, that delivery would be ex-godown, and that godown rent would be payable according to rates fixed in the bills of April 15, 1946. The plaint claimed interest on the godown rent at six per cent per annum, noted that rent for two months had not been paid, and specified a charge of annas eight per maund as overall handling charges, including commission. It asserted that the first defendant had paid the price of the goods and the overall charges but had failed to discharge the godown rent of Rs 28,444-6-6, and that the plaintiff therefore claimed that amount.

In the pleading, the plaintiff demanded a sum of twenty-seven thousand rupees in round figures, together with interest calculated at six per cent per annum and the fees of counsel for preparing and transmitting the notice. The plaint expressly limited the claim to the amount of godown rent, the prescribed interest, and the lawyer’s charges, while the statements concerning the contract for the sale of black gram and its terms were presented merely as background facts that induced the transaction. Those historical details were not, in the plaintiff’s view, elements of the cause of action that formed the basis of the suit. Accordingly, the essential cause of action disclosed in the plaint was the recovery of the godown rent that the first defendant, through the second defendant, was obligated to pay for storing the goods, the rates for which were specified in the bill submitted by the plaintiff. The Court therefore needed to determine whether this real cause of action had been sufficiently articulated in the notice served under Section 80 of the Code. Turning to the notice, labelled Exhibit P-6, paragraph 3 stated that the plaintiff had supplied approximately eleven thousand tons of black gram to the first defendant, the Madras Government, around the year 1945 through the Assistant Marketing Officer of the Madras Government stationed at Nagpur, who was identified as the second defendant. This paragraph clearly indicated that, for the purpose of the black-gram sale, the second defendant acted on behalf of the first defendant. Paragraph 4 alleged that the black gram remained undespached for more than two months because the Madras Government failed to arrange transport facilities, implying that the goods were expected to be dispatched after the two-month period. The notice referred to correspondence on the subject, including a letter from the Assistant Marketing Officer, which was attached for reference. Paragraph 5 mentioned the plaintiff’s bill that the first defendant sought to verify against its account books, and the penultimate paragraph claimed interest at nine per cent per annum.

The counsel appearing for the appellant argued that the notice did not clearly indicate whether the plaintiff’s claim arose from a contract for the payment of godown rent or from damages for the use and occupation of the plaintiff’s premises, nor did it specify through whom the first defendant was alleged to have entered into the agreement for the rent or the interest thereon. Consequently, the appellant submitted that the notice failed to satisfy the requirements of Section 80. In addressing this objection, the Court considered the observations made in the earlier decision of Dhian Singh Sobha Singh v. Union of India, noting that “We are constrained …”. The Court was reminded that while the provisions of Section 80 must be strictly complied with, a rigid, pedantic examination of the notice is not required; rather, common-sense interpretation should guide the analysis, as emphasized in the judgments of Pollock C.B. in Jones v. Nicholls and Beaumont C.J. in Chandu Lal Vadilal v. Government of Bombay. This approach requires balancing the literal wording of the notice with the purpose and object of the statutory provision.

The Court observed that the approach taken by the High Court to the question was not well founded. It noted that the Privy Council had undoubtedly held that the provisions of the relevant section required strict compliance, but the Court clarified that such strictness did not require a pedantic examination of the notice divorced from common sense. Referring to the judgment of Pollock C.B. in Jones v. Nicholls (1844) 153 ER 149 at page 150, the Court quoted the words, “we must import a little common sense into notices of this kind”. It also cited Beaumont C.J.’s observation in Chandu Lal Vadilal v. Government of Bombay, ILR (1943) Bombay 128: (AIR 1943 Bombay 138), that “One must construe Section 80 with some regard to common sense and to the object with which it appears to have been passed..”. The Court then reminded that Exhibit P-6 was a legal notice of a suit sent through counsel. In legal terminology, a claim for “rent” can arise only from a contractual basis. Throughout the notice the claim was described as “godown rent” rather than as damages for use and occupation, and therefore, prima facie, the claim appeared to be founded on a contract. The Court noted that paragraph three of the notice expressly stated that the supply of black gram by the plaintiff to the first defendant had been arranged by and through the Assistant Marketing Officer, who was the second defendant. The arrangement for the payment of godown rent was merely incidental to the supply contract, and it was not unreasonable to infer that this payment arrangement also occurred through the second defendant acting on behalf of the first defendant. Paragraph two of the notice sought relief by directing that the Madras Government should pay the amount claimed; if the government failed to pay or the failure was attributable to an officer of the government, that officer should be held personally responsible. This language indicated that the transaction had been carried out through an official, and the only officer identified in the notice was the Assistant Marketing Officer who had facilitated the supply of the goods. Moreover, paragraph three indicated that the claim for godown rent related to the storage of eleven thousand tons of black gram. Paragraphs one and four explained that the rent became due because the goods remained undespached for more than two months due to the first defendant’s failure to arrange transport facilities. The bill referred to in paragraph five was said to disclose the rate at which the godown rent was calculated and the period for which it was claimed. Consequently, on a fair reading of the notice, the Court concluded that the notice adequately disclosed the existence of a contract for the payment of godown rent, the quantity of goods stored, the rate and period for which the rent was claimed, and the first defendant’s failure to make the required payment.

The Court observed that the notice contained sufficient particulars to allow the first defendant, who was the appellant in these proceedings, to understand the nature of the plaintiffs’ claim and to determine whether that claim ought to be admitted or contested. By setting out the essential points of the dispute, the notice enabled the appellant to know what was being claimed against it. After a careful examination of the terms of the notice, the Court was not persuaded by the submission made by counsel for the appellant. The Court found that the appellant’s contention was not supported by the material set out in the notice. This assessment was deemed adequate to resolve the matter, and consequently the appeal was dismissed and the costs were awarded against the appellant.