Amar Nath Dogra vs Union Of India

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

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 10 April, 1962

Coram: B.P. Sinha, K.N. Wanchoo, N. Rajagopala Ayyangar, P.B. Gajendragadkar

In this matter, the Supreme Court recorded that the appeal, granted by special leave, was filed against the judgment of the Judicial Commissioner of Himachal Pradesh, which had affirmed a decree issued by the Senior Sub‑Judge of Mandi dismissing the appellant’s suit. The case concerned Amar Nath Dogra versus the Union of India and was decided on 10 April 1962. The bench comprised Justices B. P. Sinha, K. N. Wanchoo, N. Rajagopala Ayyangar, and P. B. Gajendragadkar, with Justice Ayyangar authoring the judgment. The factual background, as outlined by the Court, began with a public auction held on 25 February 1952 in Mandi, Himachal Pradesh, for the grant of a monopoly vend‑licence to retail country‑liquor for the period from 1 April 1952 to 31 March 1953. The appellant emerged as the highest bidder, offering Rs 1,28,600, and his bid was accepted. Under the auction terms, one‑sixth of the bid amount, namely Rs 21,460, had to be deposited within one month, which the appellant duly furnished. After commencing operations under the licence, the appellant paid the required monthly instalments of Rs 10,714 for both April and May. Thereafter, the appellant alleged that the Excise authorities had failed to fulfil certain obligations, particularly concerning the supply of liquor, and correspondences reflecting these disputes were exchanged. Although the authorities reportedly attempted to rectify the deficiencies, the appellant remained dissatisfied, consequently halting his liquor sales. He then served a notice dated 2 September 1952, under section 80 of the Civil Procedure Code, on the Government, asserting a claim for damages for the alleged breach of stipulated conditions. Following receipt of this notice, the Collector of Excise suspended the appellant’s licence pursuant to section 36 of the Punjab Excise Act, 1914, and subsequently, under section 39 of the same Act, assumed control of the vend‑shops previously managed by the appellant. Because the appellant failed to pay the instalments due from June 1952 onward, the Collector also initiated recovery proceedings for those outstanding amounts. In response, the appellant instituted suit number 345 of 1952 before the Sub‑Judge of Mandi on 26 November 1952, joined by other similarly situated parties whose liquor licences had also been taken, seeking a permanent injunction to restrain the State of Himachal Pradesh from recovering the balance of the licence fees owed. Several technical objections concerning the maintainability of the suit were raised, and the appellant subsequently withdrew the suit on 12 May 1953, having been granted liberty under Order 23, Rule 1 of the Civil Procedure Code to file a fresh suit. Exercising that liberty, the appellant filed a new suit, which gave rise to the present appeal before this Court.

The appellant instituted a suit before the District Judge of Mandi on 5 May 1953, and the suit was essentially for damages on the ground of breach of contract. The Union of India, which was the respondent, raised several defences. On the merits it denied liability, and it also raised two technical defences. The first technical defence was that the suit was defective because a proper notice required by section 80 of the Civil Procedure Code had not been served. The second technical defence was that the suit was barred by the Punjab Land Revenue Act as applied in Himachal Pradesh, as well as by the Punjab Excise Act, 1914 and the rules framed under that Act. The learned District Judge accepted the technical objections raised by the respondent and, in addition, recorded findings on the merits of the case. The Judge found that most of the items of claim advanced by the appellant were not sustainable, and consequently dismissed the appellant’s suit. The appellant then appealed to the Judicial Commissioner of Himachal Pradesh. The Commissioner affirmed the findings of the District Judge on the technical objections and also upheld the findings on the merits that were adverse to the appellant. However, the Commissioner reversed one finding in which the trial‑Judge had ruled in the appellant’s favour. The appeal was therefore dismissed. After the dismissal, the appellant applied for a certificate of fitness under Article 133(1)(b) of the Constitution in order to seek leave to appeal to this Court, but the certificate was refused. The appellant subsequently obtained special leave to appeal from this Court, and that is the appeal now before the Court. The Court observed that the merits of the appellant’s claim for damages could be considered only if the suit was maintainable. Because the Court was of the opinion that the appeal must fail principally on the ground that the suit was not maintainable due to non‑compliance with the requirements of section 80 of the Civil Procedure Code, the Court did not hear counsel on the merits of the breach‑of‑contract claim or on the relief that might have been awarded. The Court therefore confined itself to the factual enquiry necessary to determine the point that the suit was not maintainable because the requisites of section 80 of the Civil Procedure Code had not been complied with. Section 80 provides: “No suit shall be instituted against the Government or against a public officer in respect of any act purporting to be done by such public officer in his official capacity, until the expiration of two months next after notice in writing has been delivered to, or left at the office of – (a) in the case of a suit against the Central Government except where it relates to a railway, a Secretary to that Government; (b) … (c) … and, in the case of a public officer, delivered to him or left at his office.”

Section 80 of the Civil Procedure Code requires that a plaint must set out the cause of action, the name, description and place of residence of the plaintiff, and the relief claimed, and it must also state that the statutory notice has been duly delivered or left. The Court noted that compliance with these mandatory requirements is essential for any suit governed by section 80, and a suit that fails to meet these conditions is liable to be dismissed; this point was not contested. Learned counsel, however, submitted that the plaintiff had substantially complied with the statutory requisites, and the Court indicated that it would address that particular claim. According to the last part of section 80, the plaint must contain a statement that the notice has been delivered or left; therefore, the appellant, in paragraph 20 of his plaint, asserted that a notice under section 80 of the Code had been served to the defendant through the Collector of Mandi on 4 September 1952 and through the Chief Secretary on 3 September 1952. The plaint further disclosed that an earlier injunction suit had been withdrawn on 12 May 1953 with permission to file a fresh suit upon payment of costs, which were deposited on 13 May 1953 as evidenced by Challan No. 17 of 1953, and a copy of the order was attached. The Union of India, in its written statement, objected that the notice described in paragraph 20 did not satisfy the requirements of section 80. It argued that a fresh notice was necessary for the institution of the present suit, that the plaintiff had failed to serve such a notice, and that the notice mentioned was defective and unlawful. Consequently, the Union contended that the present suit was inconsistent with the notice, should be deemed to have been filed without notice, and therefore was not maintainable. The objection raised three distinct points for consideration: first, that where a suit is instituted after a statutory notice but subsequently withdrawn with liberty to file a fresh suit, a new notice is required before the second suit may be filed; second, that the allegations and reliefs pleaded in the plaint were at variance with the cause of action and reliefs set out in the notice issued under section 80; and third, that the notice itself was defective because it did not comply with the statutory requirements. The Court observed that the first objection lacked substantial merit. It held that if the present plaint had been preceded by a notice that satisfied the conditions of section 80, the existence of an earlier suit that had been filed and later withdrawn could not, on any principle, be said to have exhausted or extinguished the effect of the earlier notice.

The Court indicated that it would focus primarily on the second objection raised by the respondent, namely that the plaint filed by the appellant showed a substantial lack of conformity with the notice issued under section 80 that was relied upon in paragraph 20 of the plaint. For this purpose the Court examined in some detail the allegations and the reliefs set out in both the plaint and the notice to determine the extent to which the respondent’s claim of disconformity and variance was substantiated. The examination began with the plaint. After mentioning the auction that took place on 25 February 1952, wherein the vend‑licence was leased to the appellant for the financial year 1952‑53 and after reciting the material terms and conditions of that auction, the plaint alleged in paragraph 2 that the defendant had broken the contract, which gave the plaintiff a right to sue for damages. The several heads of claim that together formed the total claim for damages, for which a decree was prayed, were set out in paragraphs 3 to 20. The first head of claim related to loss of profits that the plaintiff said arose because of an inadequate supply of liquor. In paragraph 3 the plaintiff alleged that a deficient supply of 632 gallons during the months of May and June 1952 had caused a loss of Rs. 5,112/8/‑ in profits that would have been earned if the supply had been proper. Paragraph 4 dealt with the non‑supply of certain special varieties of liquor during April, May and June. Paragraph 5 complained that the plaintiff had received kerosenic and unwholesome liquor, which the authorities had declared unfit for human consumption. The damages claimed on this ground were calculated in paragraph 18 of the plaint at Rs. 4,222/‑, representing the amount paid into the Treasury as excise duty for liquor that had been declared unfit, and the plaintiff also sought a refund of this sum. In paragraph 6 the plaintiff alleged that he had bid over Rs. 1,20,000 because the auction terms required that liquor be supplied in pilfer‑proof bottles with metal covers. Because that condition was not fulfilled, the plaintiff claimed a loss of Rs. ‑/8‑ per bottle, which, if the contract had continued for the full year, would have amounted to Rs. 26,400/‑. Under the same head, paragraph 8 made an additional claim for Rs. 1,047/10/‑, asserted to be the loss caused by the government charging a price based on the supply in pilfer‑proof bottles while the actual supplies were made in ordinary containers. Paragraph 7 claimed a sum of Rs. 5,008/11/‑ as the price of a deficient quantity of liquor supplied because of the use of undersized bottles.

In the plaint the plaintiff asserted a claim for a sum of Rs 5,008 11/‑, alleging that this amount represented the price of liquor that was deficient in quantity because it had been supplied in bottles that were smaller than the stipulated size. The plaintiff further complained in paragraph 9 that the contract required the government to repurchase empty bottles, a condition that had not been fulfilled; as a consequence the plaintiff claimed a loss of Rs 931 8/‑. In paragraph 10 the plaintiff alleged that the government had failed to take effective measures to suppress illicit distillation, a failure that, according to the plaintiff, caused a loss; however, the loss was not quantified and no specific monetary claim was made under that head. Paragraphs 11 through 13 set out a challenge to the legality of the actions taken by the Excise authorities, specifically the suspension of the licence and the takeover of the vending shops that were placed under the management of those authorities. In paragraph 16 the plaintiff sought a refund of Rs 21,460/‑, which, the plaintiff explained, had been deposited in the Treasury at the time the licence was granted to the appellant. Finally, paragraph 19 contained a claim that, because the government had broken the contract, the plaintiff had been deprived of a monthly profit of Rs 5,052/‑ for the unworked period of the licence year, namely from 1 July 1952 to 31 March 1953; the total loss for that period was calculated as Rs 45,471 6/‑. Adding together all of these heads of claim resulted in a total of Rs 1,09,653 11/‑. The plaint then stated that the plaintiff was entitled to a total refund and compensation of that amount, and that the particulars of the computation were set out in Schedule ‘B’. The plaintiff further limited his claim for damages and refund of amounts paid to the extent of Rs 74,935 8/3, to the items that might be found due to him. After seeking a decree for the stated sum, the plaintiff prayed in paragraph 22 for ancillary relief, requesting that the dependent be permanently restrained from recovering any licence fee or any other dues from the plaintiff. The court noted that it would not examine the notice of suit which the appellant relied upon to comply with section 80 of the Civil Procedure Code. The notice, prepared by counsel instructed to serve the Collector of Mandi and the Chief Secretary of Himachal Pradesh, set out that the appellant had been the successful bidder at the auction and recited certain contractual terms. It further claimed that, beginning on 1 April 1952, the appellant had consistently complied with the obligations under the agreement concerning the auction of the licences, whereas the Government of Himachal Pradesh had failed miserably to honour and implement the conditions stipulated therein. The notice then enumerated the alleged contraventions, first stating that the ware‑house contractors had not maintained the standard‑sized bottles, and second stating that liquor was being supplied in

It was pleaded that the licences were being supplied in bottles that had paper caps rather than in tamper‑proof containers fitted with metal lids. In addition, it was asserted that for successive months the quantities of liquor required for urgent demands were either supplied in insufficient amounts or not supplied at all. Following these grievances, the notice urged the Government to recognise and fulfil its obligations and liabilities. The notice then contained a crucial paragraph in which the drafter set out the basis of the claimed damages. The paragraph stated that the drafter was detailing the items and particulars that had caused the losses suffered up to the date of the notice and requested that the Himachal Government arrange for immediate payment of those losses. The loss claimed by L. Amar Nath Dogra was described as arising from quota that had not been supplied, or that had been supplied in undersized bottles, together with the impact of miscellaneous Excise VIII charges on supplies in ordinary bottles and the failure to maintain and enforce the buy‑back system for empty bottles. In addition, the notice claimed the return of two months of advance deposits and a deposit relating to Duty and miscellaneous Excise VIII that had been credited in the Treasury at Sunder Nagar, the total amount being specified as Rs 74,935 8/3. The drafter then demanded that the stated sum be paid either directly to the client or to the drafter without further delay.

The Court then considered the extent to which the figures set out in the plaint differed from those pleaded in the notice. At the very beginning of the proceedings the appellant had withdrawn the claim for a permanent injunction, a relief that was not included in the notice; consequently the Court did not need to examine that additional claim. It was observed that the amount claimed in the plaint had been reduced to Rs 74,935 8/3, evidently because that was the figure pleaded in the notice. However, the notice did not explain how the total of Rs 74,935 8/3 was computed, nor did it disclose the manner in which the individual items of loss related to that aggregate figure. The Court also noted that the detailed statements annexed to the plaint did not enable the Court to infer the breakdown of the amount claimed in the notice. Moreover, the plaint contained two items of loss that could not possibly be reflected in the notice because those losses arose only after the Government had suspended the licence, subsequently cancelled it and taken over the vending shop under its own management. The two items were (i) loss on the annual liquor quota, calculated at Rs 26,400, and (ii) loss of profit for the period from 1 July 1953 onward, calculated at Rs 45,471 6/-. If these two amounts were deducted from the total claim of Rs 1,09,653 11/-, the balance would be only Rs 37,782 5/-. Yet, based on the same items of complaint, the notice claimed a sum of Rs 74,935 8/3. Additionally, a single item appearing both in the notice and in the plaint concerned the refund of the initial deposit of Rs 21,460, which represented one‑sixth of the bid amount paid into the Treasury in March 1952. Subtracting this deposit from Rs 37,782 5/- would leave Rs 16,322 5/-, a figure far different from the Rs 53,475 8/3 that could be derived from the three items of complaint set out in the notice. These calculations demonstrated a complete variance between the monetary claim articulated in the notice and that pleaded in the plaint, indicating that the present case was not one in which a definite sum stated in the notice had been reduced in the plaint, but rather a case where no correspondence between the two amounts could be established.

In this case the Court noted that both the notice and the plaint included one item whose amount was certain, namely the claim for a refund of Rs 21,460/‑ which represented the initial deposit of one‑sixth of the bid amount that the appellant had paid into the Treasury in March 1952. The Court explained that if this amount were deducted from the balance of Rs 37,782/5/‑, which resulted after subtracting the two post‑licence loss items from the total claim of Rs 1,09,653/11/‑, the remaining sum would be Rs 16,322/5/‑. The Court contrasted this figure with the amount of Rs 53,475/8/3 that appeared in the notice as the total claim for the appellant’s three items of complaint – the alleged failure to supply standard‑sized bottles, the alleged failure to observe the buy‑back system, and the alleged non‑supply of liquor in pilfer‑proof bottles. From these calculations the Court concluded that there was a complete mismatch between the amount claimed in the notice and the amount claimed in the plaint. It emphasized that the situation was not one where a definite sum claimed in the notice had been reduced in the plaint; rather, there was no way to establish any relationship between the claim made in the suit and the claim made in the preceding notice. The Court observed that the amounts listed under the various heads in the notice could, for all the Court knew, be for a trivial sum under one head and an exaggerated sum under another, making it impossible to identify any specific sum in the plaint with the sum alleged in the notice. The Court further observed another aspect of the matter. It pointed out that the notice served by the appellant contained several heads of claim, although all of them arose out of a single contract. On a reasonable construction of Section 80 of the Civil Procedure Code, the Court held that the authority to whom the notice was addressed had a right to be informed of the claim of the party for each of the several heads. While acknowledging that a notice under Section 80 is not a pleading and need not duplicate the plaint, the Court stressed that, in view of the purpose of the section, the notice must contain sufficient detail to inform the recipient of the nature and basis of the claim and of the relief sought. The Court reiterated that a notice must be interpreted sensibly, not pedantically, and must convey substantial information enabling the recipient to assess the prospective plaintiff’s claim and to avoid the suit. For the reasons discussed, the Court found that the notice before it did not provide the necessary substantive information.

The Court observed that the matter under consideration had already been answered in the negative. It then referred to the argument presented by counsel, who drew the Court’s attention to a prior decision of this Court in State of Madras v. C. P. Agencies. In that case, Chief Justice Das, speaking for the bench, explained that the purpose of section 80 is plainly to furnish the Government or a public officer with sufficient notice of any suit that is intended to be filed against them. Such notice enables the concerned authority to examine the situation and decide for itself whether the plaintiff’s claim ought to be accepted or contested. The Chief Justice further stressed that, for the Government or public officer to reach an informed decision, the notice must disclose the nature of the contemplated suit, the factual basis of the claim, and the exact relief that is being sought.

The Court also noted that counsel relied on a later passage where the learned Chief Justice extracted a statement from the judgment reported as Dhian Singh Sobha Singh v. Union of India ([1958] S.C.R. 781). That passage quoted the Privy Council’s requirement that the terms of section 80 be strictly observed, while clarifying that such strictness does not require a pedantic or unrealistic examination of the notice, and that the notice must be read in a common‑sense manner.

Applying this line of reasoning, the Court held that the notice examined in the earlier case had sufficiently complied with the requirements of section 80. However, the Court emphasized that this finding was based on a notice that enumerated the several heads of the claim in detail. Referring to the notice currently before the Court, the learned Justice set out the various paragraphs of that notice and observed that, on a fair reading, the notice disclosed the existence of a contract for the payment of godown rent, the quantity of goods, the rate at which they were priced, the period for which the claim was made, and the failure of the first defendant to make the payment. These particulars, the Court said, were adequate to enable the first defendant—who is the appellant—to understand the essence of the plaintiff’s claim and to decide whether to concede or resist it.

The Court then pointed out that the present notice lacks precisely those essential details. While there is a general allegation that the Government has not complied with the contract, the notice does not break down the claim into the specific heads that were set out in the earlier notice. The Court observed that, had the notice specified the amount claimed under each head, the Government would have been able to assess whether it was worthwhile to settle the dispute by paying the demanded sum. Because such itemisation is missing, the Government was deprived of the opportunity to evaluate the claim in the manner envisioned by section 80.

The Court observed that the notice of September 2, 1952 did not provide any opportunity for the first defendant because of its form and the way in which the relief was framed. The only portion of the notice that contained a specific monetary figure concerned the claim for a refund of Rs 21,460, which represented the advance deposit paid before the licence was issued. However, the Court held that this particular claim was barred by section 40 of the Punjab Excise Act, which expressly provides that when a licence, permit or pass is cancelled or suspended under the specified clauses of sections 36 or 37, the holder is not entitled to compensation for the cancellation or suspension, nor to the return of any fee or deposit paid. Consequently, the Court concluded that, taking into account both section 80 of the Civil Procedure Code and the prohibition contained in section 40 of the Punjab Excise Act, the plaintiff’s entire suit must fail.

Turning to the argument raised under section 80 of the Civil Procedure Code, the Court examined the additional submission made by counsel for the respondent. Counsel contended that despite any other defects in the September 2, 1952 notice, the notice nevertheless complied with the literal requirements of section 80, and therefore the Court was bound to regard it as valid. He emphasized that section 80 required only that a notice state the course of action proposed and the relief sought. According to counsel, the notice identified a breach of a single, entire contract and listed the various stipulations alleged to have been violated, thereby satisfying the requirement that the cause of action be stated. He further argued that the notice set out the relief as damages by way of compensation, specifying the amount claimed. Counsel pointed out that while the plaint totalled damages at Rs 1,09,653 11/–, it limited the claim to Rs 74,935 8/3, the figure used in the notice, and therefore the Court should have jurisdiction to grant relief at least for the overlapping items. The Court rejected this line of reasoning, holding that the validity of the notice could not be sustained on the basis suggested. It noted that at the time the notice was issued, the Collector had neither suspended nor cancelled the licence, and that the notice sought relief on the basis of alleged breaches of contractual stipulations, a context that did not satisfy the statutory requirements.

In the notice that was challenged, the petitioner relied on a contract that was still subsisting at the time the notice was issued. The notice contained a paragraph that explained the contractual position, and it read as follows: “Under the conditions and circumstances disclosed, my client could not be forced to pay in the fees etc. as accrued without first making good to them by you the damages and losses that have resulted hereto before on account of the Government not fulfilling the material conditions. it is therefore requested that no untoward action be proposed by the Government in that behalf, for it would otherwise be unwarranted, illegal and unjustified. The licence, my client has been and would be willing to carry out his part as relates to auction conditions if the Government gives immediate redress in the terms abovenoted, and arrange supplied in pilfer‑proof bottles. Otherwise, treating the contract determined he will be forced to take the matter to law courts in which event the Himachal Government will be liable in addition to the damages; to costs and expenses that may accrue for the stated steps.” When the plaintiff later filed the suit, the factual matrix had changed substantially. By the date of the plaint the contract had been terminated, the licence had been suspended, and the Collector had assumed management of the shops pursuant to section 39 of the Punjab Excise Act. Consequently, the circumstances that existed when the notice was issued differed radically from those that existed when the plaint was filed, a difference that was reflected in the distinct allegations and the separate reliefs claimed in the two documents. In summary, the notice was predicated on an alleged breach of specific stipulations in a contract that, at that moment, remained in force; the sum of Rs 74,935/8/3 was claimed as damages for each such breach. By contrast, the plaint alleged that the Government had repudiated and cancelled the contract, thereby breaking the entire agreement and taking over the shops, and the heads of claim set out in the plaint formed the basis for the computed damages. In view of these contrasting factual backgrounds, the Court held that even a narrow and strict construction of section 80 was not satisfied, and therefore the suit could not succeed. As a result, the Court concluded that the whole claim in the suit must fail for the reasons previously indicated. Accordingly, the appeal was dismissed, and each party was ordered to bear its own costs of the appeal.