Case Note & Summary
The appellant, a building contractor, filed three suits in 1948 claiming full payment with interest for construction work done for Bai Gangabai Memorial Hospital, Gondia, Kunwar Tilaksingh Civil Hospital, Gondia, and Twynam Hospital, Tumsar. The contracts were concluded between the appellant and the Deputy Commissioner of Bhandara. The appellant claimed that the Deputy Commissioner entered into the contracts as representative of the Provincial Government after obtaining previous sanction, and that the State Government, the Deputy Commissioner, Municipal Committee, and Dispensary Funds Committee were liable. The State of Madhya Pradesh was later substituted as first defendant. The trial court decreed part of the claim against the State of Madhya Pradesh, holding the State liable on the ground that the agreements were made for and on behalf of the State and the constructions benefited the State, but dismissed suits against other defendants. On appeals by the State, the High Court of Judicature at Nagpur set aside the decree against the State, holding that the contracts were not binding on the State Government because they were not entered into in the form required under Section 175(3) of the Government of India Act, 1935, and that the hospitals were not government hospitals, so the State derived no benefit. The High Court also rejected the plaintiff's prayer to pass decrees against the Deputy Commissioner under Order 41 Rule 33 CPC and refused leave to file a cross-objection at that stage. The plaintiff appealed to the Supreme Court on certificate under Article 133(1)(c) of the Constitution. Before the Supreme Court, two grounds were urged: first, that the High Court erred in holding the State Government not liable; second, that the High Court ought to have granted relief against other defendants under Order 41 Rule 33 CPC. The Supreme Court found no substance in the first contention, agreeing with the High Court that the Deputy Commissioner did not act on behalf of the State Government and that the State derived no benefit, so the suits against the State were rightly dismissed. On the second contention, the Supreme Court held that the wide wording of Order 41 Rule 33 empowers the appellate court to make whatever order it thinks fit, not only as between appellant and respondent but also as between respondent and respondent. Failure to file a cross-objection under Order 41 Rule 22 does not preclude relief under Order 41 Rule 33, as Rule 22 permits objections directed only against the appellant, and only in exceptional cases against co-respondents. The High Court refused to exercise its powers under Rule 33 on an incorrect view of the law. Accordingly, the Supreme Court upheld the finding that the State was not liable but remanded the appeals to the High Court for decision on what relief should be granted to the plaintiff under Order 41 Rule 33 against such other defendants as the High Court thought fit.
Headnote
A) Civil Procedure - Appellate Court Powers - Order 41 Rule 33 of Code of Civil Procedure, 1908 - Appellate court has power to pass any decree or order which ought to have been passed, including in favour of respondents who did not file appeal or cross-objection; power extends between co-respondents; failure to file cross-objection under Order 41 Rule 22 does not preclude relief under Rule 33. The High Court refused to exercise powers under Order 41 Rule 33 on mistaken view that plaintiff should have filed cross-objection; Supreme Court held that such refusal was based on incorrect view of law and remanded appeals for consideration of appropriate relief. Held that appellate court’s power under Order 41 Rule 33 is not limited by failure to file cross-objection under Order 41 Rule 22. B) Government Contracts - State Liability - Section 175(3) of Government of India Act, 1935 - Contracts entered into by Deputy Commissioner without required form are not enforceable against State Government. Supreme Court agreed with High Court that State was not liable for any of the contracts as Deputy Commissioner did not act on behalf of State, hospitals were not government hospitals, and State derived no benefit; dismissed suits against State. Held that State Government is not liable for contracts not executed in accordance with statutory requirements.
Issue of Consideration
Whether the State Government was liable for contracts signed by the Deputy Commissioner without compliance with Section 175(3) of Government of India Act 1935; Whether the High Court ought to have granted relief to the plaintiff against other defendants under Order 41 Rule 33 CPC despite not filing a cross-objection under Order 41 Rule 22 CPC.
Final Decision
Appeals allowed in part; Supreme Court upheld finding that State Government was not liable for any of the contracts, but remanded appeals to High Court for decision on relief to plaintiff under Order 41 Rule 33 against such other defendants as High Court thought fit, holding that High Court's refusal was based on incorrect view of law.
Law Points
- Order 41 Rule 33 CPC empowers appellate court to pass any decree or order which ought to have been passed
- including in favour of respondents who did not file appeal or cross-objection
- power extends between co-respondents
- failure to file cross-objection under Order 41 Rule 22 does not bar relief under Order 41 Rule 33
- appellate court has wide discretion to make appropriate orders to do complete justice
- State Government not liable for contracts signed by Deputy Commissioner without compliance with Section 175(3) Government of India Act 1935
