State of Orissa vs Birendra Mohan Patnaik

R.N. Misra, J.—This appeal by the State of Orissa is directed against the judgment and decree of the learned fourth Additional Subordinate Judge of Cuttack decreeing the Plaintiff''s suit.

Sometime in 1964, the State Government decided to set up a Commission under the Commission of Inquiry Act of 1951 to inquire and make a report over the students'' agitation in the State and Mr. Justice Barman of this Court was nominated to head the Commission. The Plaintiff at that time was working as Standing Counsel of the Vigilance Department of the State. On 10th of November, 1964, under Ext. 1, the Inspector-General of Police in response to a radio message of 9th November wrote to the Additional Secretary to Government in the Home Department recommending the appointment of the Plaintiff as State''s lawyer for the Commission. On 20th of February, 1965, under Ext. 2, the Home Secretary informed the Inspector General that Government have decided to appoint the Plaintiff to represent the State Government before the Commission of inquiry and formal orders of Government would be issued soon. He therefore, requested the Inspector General to go ahead in processing the matter. A copy of Ext. 2 was communicated to the Plaintiff. In Ext. 1, the Inspector General had indicated:

Shri B.M. Patnaik be given the fees and rate of I. A. admissible to him as Standing Counsel, Vigilance. Since he has to spend large number of days in scrutinising records, consultations and discussions, examination of officers prior to commencement of enquiry by the Commission, he should be given the same daily fees for days on which he spends for more than 4 hours at headquarters or outside.

By letter dated 28th of April, 1965 (Ext. 6) the Home Secretary'' communicated to the Inspector General the terms of appointment of counsel and forwarded a copy thereof to the Plaintiff. No provision was made in Ext. 6 for payment of any remuneration to the Plaintiff for his work at headquarters or outside as contemplated in Ext. 1. Plaintiff, according to him, started the processing work from 23rd of February, 1965 by perusing records and documents, holding conferences and discussions drafting of affidavits and in the said connection visiting places. There were preliminary sittings of the Commission and he represented the State at such sittings. The Barman Commission started its regular sittings after May, 1965 and by end of the year, the hearing was over. Plaintiff has been already paid his fees for appearances before the Commission. He laid claim for payment of fees at the rate of Rs. 150/- per day in terms of what had been indicated in Ext. 1. On 17th November, 1965, the Legal Remembrancer of the State Government communicated the Government decision to pay a lump sum of Rs. 3,000/- to the Plaintiff is respect of his claim under that bead. Plaintiff received this payment without prejudice and kept on agitating for the balance amount until he was communicated on 3-11-1967 (vide Ext. 27) that he had been paid all his dues in connection with the Commission of Inquiry into the Students'' Agitation and there did not appear to be any further admissible claim for payment. Thereupon, the Plaintiff instituted the suit on 16th April, 1968, after serving a notice u/s 80 of the CPC asking for a decree for the balance amount after adjusting receipt of Rs. 3,000/- 3. The State Government in its written statement took the stand that it had never agreed to pay the fee in question to the Plaintiff. Plaintiff was the Standing Counsel for the Vigilance Department on payment of a retainer fee and dally fee for appearance to vigilance cases. The proposal given by the Inspector General in Ext. 1 was under consideration when Ext. 2 was issued in February, 1965 and within a couple of months after Ext. 2, the Government order fixing the terms of engagement of the Plaintiff were communicated vide Ext. 6. The State Government had not agreed to pay the Plaintiff the extra fee as demanded by him; yet Government sanctioned a lump sum amount of Rs. 3,000/ to the Plaintiff for the preparation work when he represented. In the absence of a contract for the payment, the Plaintiff is not entitled to the same by filing a suit. It was further pleaded that the Plaintiff was getting a retainer''s fee as Vigilance Counsel and there was, therefore, no justification for the claim laid.

The evidence in this case is more or less one-sided. Plaintiff examined 3 witnesses, being the then Legal Remembrancer (p. w. 1), the then Inspector General of Police (p. w. 2) and himself (p. w. 3) and exhibited series of documents on his side. On the defence side, the Superintendent of the Law Department was examined as D.W. 1. No documents were exhibited.

Six issues were raised and Issues 3 and 4 constituted the main Issues being

Whether there was a legal contract between the Plaintiff and the Defendant in relation to the fees of the Plaintiff? and

Whether the Defendant is liable to pay the amount as prayed for?

These two Issues were examined together by the learned Trial Judge who found that there was a completed contract between the parties in the matter of payment of fees and Ext. 6 or the subsequent correspondences did not affect it. Plaintiff became entitled to the fees claimed by him. He examined the alternate contention of admissibility of Plaintiff''s claim u/s 70 of the Indian Contract Act and held that even if there was no contract under the said provision Plaintiff was entitled to a decree for the claim. He, however, found that by mistake the claim had been made for 83 days as against 82 days and accordingly scaled down the claim from Rs. 9,450/- to Rs. 9,300/-. Against this decree, the Defendant has carried the appeal.

It may be stated that the Plaintiff is the present Advocate-General of Orissa and, therefore, Mr. S. Mohanty, a senior advocate, has been engaged to argue the appeal on behalf of the State. He contends:

(1) The finding of the learned Subordinate Judge that there was a completed contract is contrary to the evidence on record and cannot be sustained;

(ii) The scope of Section 70 of the Contract Act has not been properly understood and has been erroneously extended to cover a case of the present type;

(iii) The learned Trial Judge should have accepted, in case the claim was tenable u/s 70 of the Contract Act that payment of Rs. 3,000/- admittedly made to the Plaintiff on account of the claim raised in the suit was adequate compensation contemplated under the section; and

(iv) Whatever may have been the position prior to Ext. 6, after the terms were finally settled, Section 70 of the Contract Act was no more applicable.

We may first examine whether there was a completed contract in regard to the fees now in dispute. On the 10th of November, 1964, the Inspector General wrote his letter (Ext. 1) to the Additional Secretary to Government In the Home Department, material portions whereof read thus:

With reference to radio-message No. 29966/P dated the 9th November, 1964, I recommend that, to start with, Sri B. M. Patnaik, Standing Counsel, Vigilance, be appointed. I discussed the matter with Sri Patnaik who informed me that it will not be necessary to appoint any other lawyer to assist him at this stage but as and when the enquiry by the Commission makes some progress, he will make a request for it.

Sri B. M. Patnaik be given the fees and rate of T. A admissible to him as Standing Counsel, Vigilance.

Since he has to spend large number of days in scrutinising records, consultations and discussions, examination of officers prior to commencement of enquiry by the Commission, he should be given the same daily fees for days on which he spends for more than 4 hours at headquarters or outside.

There is no indication in this letter that the recommendation of the Inspector General represented the fees quoted by the Plaintiff. Ext. 2 is the letter of the Home Secretary to the Inspector General dated 20th February, 1965, the material part whereof read thus:

I am desired to say that Government have decided to appoint Shri B. M. Patnaik, Bar-at-Law, advocate as Standing Counsel to represent the State Government before the Commission of Enquiry.

Formal orders of Government will issue soon in this regard.

1 am to request you to go ahead in processing the matter.

A copy of Ext. 2 was endorsed to the Plaintiff as would appear from Ext. 2(a). From 23rd of February, 1965, Plaintiff claims to have started work. On 5th of April, 1965, Plaintiff wrote a letter to the Inspector General, the material part of which reads thus:

You may recollect that when I was requested by you and in a memo by the Home Secretary to take up the work of preparation for the Commission, I explained to you the scope of the work. A lot of work for the purpose of preparing affidavits and getting ready for hearing has to be done. I told you that I would charge Rs. 160/- for days on which I spend four or more hours in the work. You asked me to go ahead and told me that you would move Government. I am sure you must have been aware from your officers the strain involved in the work.

...

On 8th April, 1965, under Ext. 7, the Inspector General wrote to the Home Secretary recommending:

Shri B. M. Patnaik be allowed a daily fee of Rs. 150/- for days on which he spends for more than if hours at headquarters or outside for the purpose of scrurinising records, consultations and discussions and examination of officers prior to commencement of enquiry by the Commission.

On 22nd April, 1965, the Plaintiff wrote a letter to the Home Secretary mentioning inter alia:

In pursuance of your request and the request of the Inspector General of Police, I took up the preparation on behalf at the State for the Commission, of Enquiry from about 25th of February, 1965. The work keeps me throughout busy and I have almost to work round the clock. I had suggested my fees to the Inspector General of Pollee and I am told Inspector General has written to the Government. In the meantime on account of non-receipt of orders from the Accountant General, I am not in a position to draw my bill as Standing Counsel Vigilance....

I shall be thankful if you kindly see that orders of Government regarding my fees are communicated to me at a very early dale so that I am able to forward my bill and receive payment by the first week of May, 1965.

...

On 30th April, 1965, Plaintiff wrote to the Inspector general under Ext. 8. So far as relevant to the dispute In hand, it was stated therein thus:

It may be recalled that on your request and on the receipts of a D. O. letter No. 4857/P, Bhubaneswar dated 20-2-1965 addressed to you from the Home Secretary, a copy of which was forwarded to me in Memo No. 4858/P dated 20-2-1965, I took up the preparation for filing of affidavits and written statements on behalf of the State. Since there was no time and

on your request I took up the work without waiting for terms of engagement to be settled. However, in the minimum it was understood that I would be getting Rs. 160/- per diem for days on which I spend four hours or more in preparation work at home or elsewhere....

I find it difficult to continue to shoulder the responsibility of the work in this uncertain state. I would request you to please settle up the question of my fees and the engagement and fees of Junior Counsel within three or four days. If Government are not agreeable to the fees quoted by me, they have to make their own arrangements. On the other hand if Government are agreeable to engage me on the terms of appointment quoted by me, then I have to work hard straightaway for hearing which commences from 8-5-1965. I think this matter should be settled within three or four days in the very interests of the Government and the interests of the work with which I am entrusted.

After receiving Plaintiff''s letter, the Inspector General addressed the Deputy Secretary to Government in the Home Department on 1st May, 1965, under Ext. 25, saying:

In this connection a copy of D. O. No. 25 dated the 30th April, 1965, from Shri B. M. Patnaik. Standing Counsel is enclosed. In my D. O. No. 130/Con. Adm., dated the 8th April. 1965. I had recommended that

(a)...

(b) he be allowed a daily fee of Rs. 150/- on the days on which he spends for more than 4 hours at headquarters or outside for the purpose of scrutinising records, consultations and discussions and examination of officers prior to commencement of enquiry by the Commission ; and

(c)...

I reiterate that the work involved in the presentation of the case on behalf of the State before the Commission is very heavy and onerous. This will be evident from the fact that the Standing Counsel had to spend long hours at headquarters and outside in scrutinising records; consultations and discussions with the Revenue Divisional Commissioners, Deputy Inspector-General of police, District Magistrates, Superintendents of Police and Heads of Educational Institutions had to be examined by him and affidavits prepared before they were filed with the Commission. I have personally seen Shri Patnaik working very late at night and preparing affidavits after interrogating officers.

In the meantime by letter dated 28th of April, 1965 (Ext. 6), the Home Secretary had communicated the Inspector General of Police the terms of fees of Plaintiff wherein there was no mention of remunerating him for the preparatory work done at home. A copy of this letter was communicated to the Plaintiff on 4-5-1965. We called upon Respondent''s counsel to inform us the date of receipt of this letter by the Plaintiff, but they have given us to understand that there is no evidence. In view of the fact that this was endorsed by an officer of the establishment then attached to the Commission where Plaintiff was working, we are prepared to assume that he got the same on the same day.

For the tone of the correspondence of the Plaintiff and the Inspector General on one side and the officers of the Home Department on the other, there is no scope to doubt that there was no contract regarding the disputed aspect of the fees at any stage until Ext. 6 came from Government fixing the terms of appointment. The learned Trial Judge did not scrutinise the documents at all though he quoted some of them. Otherwise, he could not have overlooked the aspects which we have noticed by underlining In the correspondence. The Inspector General had obtained certain particulars from the Plaintiff and was still pressing upon Government for acceptance of the same. The Plaintiff knew that there had been no formal settlement yet and was still pressing for final terms. We would accordingly vacate the finding of the learned Trial Judge and hold that there was no contract much less a completed one as found by the trial Court regarding the fees on the disputed aspect of his engagement until Ext. 6. Ext. 6 covered the terms of appointment in toto except to the extent that there was specific variation subsequently regarding the rates of daily fees for appearance before the Commission.

The next question for consideration is about the applicability of Section 70 of the Contract Act. That section provides:

Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person en joys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.''

The Supreme Court in the case of State of West Bengal Vs. B.K. Mondal and Sons, , observed:

...Therefore, in cases falling u/s 70 the person doing something for another or delivering something to another cannot sue for the specific performance of the contract nor ask for damages for the breach of the con tract for the simple reason that there is no contract between him and the other person for whom he does something or to whom he delivers something. All that Section 70 provides is that if the goods delivered are accepted or the work done is voluntarily enjoyed then the liability to pay compensation for the enjoyment of the said goods or the acceptance of the said work arises. Thus, where a claim for compensation is made by one person against another u/s 70, it is not on the basis of any subsisting contract between the parties it is on the basis of the fact that something was done by the party for other and the said work so done has been voluntarily accepted by the other party. That broadly stated is effect of the conditions prescribed by Section 70."

The principle indicated in the aforesaid case has been followed by the Supreme Court in the cases of Piloo Dhunjishaw Sidhwa Vs. Municipal Corporation of The City of Poona, ; State of Uttar Pradesh and Another Vs. Murari Lal and Brothers Ltd., , and Pannalal Vs. Dy. Commissioner, Bhandara and Another etc., . In the last of these cases, It has been held that the principle under the section equally applies to the case of State.

Now that we have held that there was no specific contract between the parties for remunerating the Plaintiff for the work for which there is dispute, and about rendition of such work there is no dispute and the Defendant has received the same and benefited thereby, we are inclined to agree that the principle embodied in Section 70 of the Conteact Act would he applicable. Two decisions to the contrary have come to our notice. One that of the Division Bench of the Patna High Court in the, case of Bhikari Jaipuria v. State of Bihar5 and the other is of the Madras High Court in the case of The Life Insurance Corporation of India, Madras Vs. K.A. Madhava Rao, . The Madras decision proceeded on the footing that there was statutory bar to payment of commission to a person who had procured insurance business but had no licence prescribed for an agent. The Patna decision concerned itself on its own set of facts about applicability of Section 175(3) of the Government of India Act, 1935. The Supreme Court decision In Mondal''s case1had been referred to and on facts distinguished. In VIEW of the settled legal position by clear authorities of the Supreme Court, we hold that the principle in Section 70 of the Contract Act is applicable to the facts of the case.

As pointed out in Mondal''s case1 which decision has been heavily relied upon by counsel for the Plaintiff before us, Plaintiff is not entitled to sue for specific performance, i. e. to claim recovery of fees at the rate offered by him. It is so because there is no agreement or contract for enforcement. He is entitled to compensation only. To allow him the rate quoted by him in the absence of acceptance thereof leading to a contract would amount to decreeing specific performance which on principle was negatived. It has been clearly ruled that what the Plaintiff can claim is only compensation. Where goods is supplied, its market price is a reasonable basis for compensation as was pointed out in one of the decisions of the Supreme Court we have already referred to. Here, however, Plaintiff claimed remuneration for his professional skill and labour. There is no clear evidence as to what it should be. In these circumstances, it must be left to be estimated. Plaintiff is admittedly a senior counsel and at the relevant time was Standing Counsel of the Vigilance Department of the State. In his deposition as p. w. 3, he has indicated his professional acumen and standing at the Bar. In these circumstances, we are prepared to estimate his remuneration for the days he would be entitled to at the rate of Rs. 100/- per day. We agree that there is an element of arbitrariness in so estimating, but it cannot be doubted that in every case of estimate there is bound to be some element of arbitrariness. Since there is no clear evidence to support the Plaintiff''s claim, either Plaintiff''s claim has to be rejected or estimate has to be resorted to. In view of the fact that he has undoubtedly worked and there is evidence to show that it has been of an onerous type, we have proceeded to estimate in the manner Indicated above.

We have already held that the terms of the engagement were finally fixed under Ext. 6 which he was communicated on 4-5-1965. We do not agree with the counsel for the Plaintiff

that even after Ext. 6 indicating the entire terms of Plaintiff''s engagement, there still remained scope for Plaintiff to claim that his remuneration for the disputed aspect of the work remained uncovered by contract. On the other hand, it must follow that the same had not been entertained. Therefore, Plaintiff would not be entitled either under the contract or by application of the principle of Section 70 of the Contract Act to any remuneration for the work in question after 4-5-1965. Upto the 4th of May, 1965, he worked for 54 days as per Schedule-A to the plaint and accordingly becomes entitled to Rs. 5, 400/-. He has already been paid Rs. 3.000/- on this account and in cur view, therefore, he would be entitled to the balance of Rs. 2,400/-.

The appeal has, therefore, to be allowed in part. The decree of the trial Court has to be vacated and in its place, Plaintiff''s suit has to be decreed for Rs. 2,400/- only with proportionate costs in the trial Court. Government seemed to have acted bona fide in the matter and in fact, the sanction of Rs. 3,000/- made by them was on the principle of Section 70 of the Contract Act. For the decree of Rs. 2,400/- on the basis of estimate, we cannot hold Government responsible for detaining the amount. Therefore, Plaintiff would not be entitled to arty interest upto the date of decree. The amount of Rs. 2,400/- shall carry future interest from the date of the decree in the trial Court at six per cent per annum till recovery. Costs of this Court shall be borne by the respective parties.

B. K. Ray, J.

I agree.

Appeal partly allowed.