Karamshi Jethabhai Somayya Vs. The
State of Bombay  INSC 49 (3 March 1964)
03/03/1964 SUBBARAO, K.
GUPTA, K.C. DAS DAYAL, RAGHUBAR
CITATION: 1964 AIR 1714 1964 SCR (6) 984
RF 1980 SC1285 (10)
Agreement-Concluded by Superintending
Engineer-If hit by s.
175(3) of Government of India Act-Supply of
Irrigation water-Transfer of right-If permission needed-Government of India
Act, 1935 (26 Geo. v. Ch. 2), s. 175(3). Bombay Irrigation Act, 1879 (Bom. of
1879), ss. 3(6), 4, 27-30.
One K had obtained sanction to irrigate
certain lands from a canal. The same year the Government proposed to reserve
certain area along the canal as factory area. According to the appellant after
some correspondence between the Government and K, the Superintending Engineer
agreed to exclude K's land from the factory area and also to give water
perpetually on the condition that he concentrated all his holding on the tail
outlet of the canal and to take the supply of water on volumetric basis.
Pursuant to that arrangement, K concentrated his holdings and shifted his
operations to that area and he was supplied water on the agreed basis. Later
the appellant and K entered into a partnership in respect of exploiting this
area. Disputes arose between the appellant and K which culminated in a consent
decree where under the appellant became the full owner of the land including
the right to use this canal water. When the appellant applied for the
recognition of the transfer the canal officer refused to do so. On appeal be
was informed that his request for supply of the canal water could not be
granted. The supply was stopped. After giving them statutory notice under s. 80
of the Code of Civil Procedure, the appellant filed a suit against the State
for a declaration of his right to water from the canal and for consequential
reliefs. The State contested the suit contending, inter alia, that there was no
concluded agreement between the Government and K. that even so, the agreement
was void inasmuch as it 'did not comply with the provisions of s. 175(3) of the
Government of India Act, 1935 and in any view the appellant could not legally
get the benefit of the agreement under s. 30 of the Bombay Irrigation Act. The
Civil Judge held that there was a concluded agreement between the Government
and K, but the transfer by K of the said right in favour of the appellant was
in violation of the provisions of the Bombay Tenancy and Agricultural Lands Act
and dismissed the suit. On appeal, the High Court held that there was neither a
concluded agreement between K and the Government nor did it comply with the
requirements of law, and the appeal was dismissed.
On appeal by special leave:
Held(i) The documents in the instant case
record a concluded agreement between the Superintendent Engineer, acting on the
order of 985 the Minister of Public Works Department, on the one hand and K on
the other agreeing to supply water so long as K had cane cultivation in the
(ii) The provisions of Bombay Irrigation Act
establishes that every person desiring to have supply of water from a canal
shall apply in the prescribed manner to the Canal Officer and that person to
whom water is supplied cannot transfer his right to another without the
permission of the Canal Officer. But if the land in respect whereof the water
is supplied is transferred, the agreement for the supply of water also shall be
presumed to have been transferred along with it.
(iii) The conduct on the part of the
Government as well as that on the part of K and the appellant also establishes
that the agreement was not under the Bombay Irrigation Act, but between the
Government and K. (iv) The agreement is void, as it has not complied with the
provisions of s. 175(3) of the Government of India Act. The contract was not
either entered into by the person legally authorised by the Government to do so
or expressed to be made in the name of Governor.
Seth Bikhraj Jaipurja v. Union of India,
 2 S.C.R. 860 and New Marine Coal Co. v. Union of India,  2 S.C.R.
859, referred to.
Union of India v. Rallia Ram, A.I.R. 1963
S.C. 1685, referred to.
Semble: While it is the duty of a private
party to a litigation to Place all the relevant matters before the court, a
higher responsibility rests upon the Government not to withhold such document
from the Court.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 552 of 1962.
Appeal by special leave from the judgment and
decree dated August 22, 1960 of the former Bombay High Court in appeal No. 432
of 1954 from Original Decree.
M. K. Nambiar, J. B. Dadachanji, O. C. Mathur
and Ravinder Narain, for the appellant.
D. R. Prem, B. R. G. K. Achar and R. H.
Dhebar, for the respondent.
March 3, 1964. The Judgment of the Court was
delivered by SUBBA RAO, J.-This appeal by special leave is directed against the
judgment and decree of the High Court of Bombay confirming those of the Civil
Judge, Senior Division, 986 Ahmednagar, Jr,, Special Civil Suit No. 6 of 1953
filed by the appellant against the State of Bombay for a declaration of his
right to water from a particular source, and for consequential reliefs.
The appellant is the owner of Shankar Tukaram
Karale Rampur Farm, situated at the tail-outlet of the Godavari Right Bank
Canal Distributary No. 17, The lands comprised in the said Farm originally
belonged to Shankar Tukaram Karale, hereinafter called Karale. In the year 1935
the said Karale had a farm for raising sugarcane consisting of 35 acres owned
by him and about 65 acres of land taken on lease by him in Ahmednagar District.
He obtained sanction to irrigate his lands on the outlet No. 17 of the Godavari
Right Bank Canal. In or about the same year the Government of Bombay proposed
to reserve certain area along the said Distributary Canal as "factory area".
After some correspondence between the said karale and the Government of Bombay,
it was the appellant's case, the Superintending Engineer agreed on July 14,
1939, to exclude Karale's lands from the factory area and also to give him
water perpetually on condition that he concentrated all his holdings on the
tail outlet of Distributary No. 17 and to take the supply of water on
volumetric basis. Pursuant to that arrangement, Karale, by purchase or
otherwise, concentrated his holdings and shifted his operations to that area
and he was supplied water on the agreed basis. In or about April 1948, the
appellant and Karale entered into a partnership for exporting the said area
whereunder the appellant had threefourths share and the said Karale had
Later on disputes arose between the appellant
and Karale in respect of the partnership which culminated in a consent decree
dated February 7, 1951, whereunder the appellant became the full owner of the
partnership business with all its assets and liabilities, including the lands
and the compact block and the right to use the canal water. When the appellant
applied for the recognition of the transfer, the Canal Officer refused to do
so. On appeal, he was informed that his request for supply of canal water could
not be granted. From April 1952 the supply was stopped.
After giving the statutory notice under 987
s. 80 of the Code of Civil Procedure, the appellant filed Special Civil Suit
No. 6 of 1953 in the Court of the Civil Judge, Senior Division, Ahmednagar, against
the State of Bombay for a declaration that the plaintiff was entitled to the
supply and use of water from the tail outlet of Distributary No. 17 of the
Canal to irrigate 100 acres of basic cane land in the concentrated area
described in Schedule 11 at the rates prescribed by the Government under the
Irrigation Act on a volumetric basis, for specific performance of the aforesaid
agreement between Karale and the Government, for recovery of damages, and for
other incidental reliefs. The State of Bombay filed a writtenstatement
contending, inter alia, that there was no concluded agreement between the
Government and Karale embodying the alleged terms stated in the plaint, that
even if there was such an agreement, it was void inasmuch as it did not comply
with the provisions of s. 175(3) of the Government of India Act, 1935, and
that, in any view, the appellant could not legally get the benefit of the
agreement under s. 30 of the Bombay Irrigation Act, 1879. On the pleadings as
many as seven issues were framed reflecting the contentions of the parties. The
learned Civil Judge held that there was a concluded agreement between the
Government and Karale on the, terms alleged by the appellant, but the transfer
by Karale of the said right in favour of the appellant was in violation of the
provisions of the Bombay Tenancy and Agricultural Lands Act, 1948, and,
therefore, there was no legal transfer of Karale's right of water in favour of
the appellant. In that view, he dismissed the suit. On appeal, the High Court
held that there was neither a concluded agreement between Karale and the
Government nor did it comply with the requirements of law. In the result the
appeal was dismissed. Hence the present appeal.
The arguments of Mr. M. K. Nambiar, learned
counsel for the appellant, may be summarized under the following heads : (1)
There was a concluded agreement between Karale and the statutory authority, the
Canal Officer, whereunder the said Karale was entitled 'to get water to his
compact block permanently from the tail outlet of Distributary No. 17 of the
Godavari Right Bank Canal so long 988 as he was willing to pay the rates for
such supply on volumetric basis. (2) As under the compromise decree between
Karale and the appellant the said block of land was transferred to the
appellant, the right under the agreement for the supply of canal water was also
transferred to him under s. 30 of the Bombay Irrigation Act, 1879 (Bombay Act
No. 7 of 1879), hereinafter called the Act. (3) Section 175(3) of the
Government of India Act, 1935, does not apply to the agreement in question for
the following reasons : (i) once the Legislature covers any matter by the
enactment of any statute, any functional power assigned to the Government or
any other authority under the said statute is exercisable only under that
statute and in virtue of the statutory authority and not in the exercise of the
executive authority of the Province within the meaning of s. 175(3) of the
Government of India Act, 1935; (ii) the agreement contemplated by s. 30 of the
Act is an agreement entered into under the Act by a statutory authority in
pursuance of a statutory power with the statutory consequences and, therefore,
such an agreement is outside the provisions of s.
175(3) of the Government of India Act, 1935;
and (iii) that apart, the expression "agreement" in s. 30 of the Act
does not mean a formal contract, but only a sanction, permission or consent
given by the Canal Officer pursuant to the authority given to him under the
Act, and, therefore, such sanction, permission or consent is not a contract
within the meaning of s. 175(3) of the (Government of India Act, 1935.
This appeal raises a question a far-reaching
importance as regards the scope of the executive authority exercised by the
Governor under the Government of India Act, 1935; but, we are relieved of the
duty to express our opinion on that question in this appeal in view of our
finding that the agreement in question was arrived at outside the provisions of
the Act and, therefore, it squarely falls within the scope of s. 175(3) of the
Government of India Act, 1935.
We shall at the outset address ourselves to
the said agreement, namely, (i) who are the parties to the said agreement; and
(ii) what are the terms thereof? 989 When the suit was pending decision of the
Civil Court, the appellant filed an application therein for directing the
Government to produce, among others, the applications made to the Government
from time to time by Karale in respect of supply of water to his farm in the
year 1935 and subsequent thereto and the office copies of the replies sent to
the said applications, the Government documents and papers, water-bills and the
records in respect _of the supply of water to the land belonging to Karale from
the year 1935.
and the correspondence that passed between
karale and' the Government between 1935 and 1939 in respect of consolidation of
his lands. Obviously these papers were required by the appellant for
establishing the case that there was a concluded agreement between Karale and
the Government or the Canal-officer. But, unfortunately, the said documents
were not produced. It is not clear from the record why and under what
circumstances the Government withheld the documents from the court, but in
appeal the High Court in its judgment remarked: "In the trial Court no
attempt was made to have this endorsement produced in Court which could have
been done if the plaintiffs Counsel had so desired by a proper application to
the Court". But the High Court felt that it was absolutely necessary in
the interests of justice to call upon the learned Government Pleader to produce
the file with reference to that particular endorsement, namely, Endorsement No.
3033/36-1 dated 28th April 1939, and directed him to do so. It disposed of the
appeal after receiving the said relevant document. Though the High Court threw
the blame for this lapse on the appellant, we do not think there was any
justification for it. Apart from the fact that the appellant asked for the
production of all the relevant documents, the Government, being the defendant
in this case, should have produced the documents relevant to the question
raised. While it is the duty of a private party to a litigation to place all
the relevant matters before the Court, a higher responsibility rests upon the
Government not to withhold such documents from the court.
Be that at it may, the documents were finally
produced before the court, and the High Court considered the same in arriving
at its conclusion. Though Mr. Nambiar suggested that the said documents 990
related to some other party, as we will indicate in the course of the judgment,
the said file dealt also with the agreement alleged to have been entered into
between Karale and the Government.
Exhibits Nos. D-67 and D-68 are the documents
on which strong reliance is placed on behalf of the appellant.
Exhibit D-67 reads thus:
Below Government endorsement No. 3033/36-1
dated the 28th April 1939:
No. 4223 of 1939 Poona, 14th July, 1939.
Returned with compliments.
2. The applicant has already been allowed to
continue his present cane irrigation of 93 acres on outlets 2 and Tail of
Distributary 17 of the Godavari Right Bank Canal for one year from 15-2-1939
pending consideration of his case in detail, in relation to the demand of the Sugar
Company formed by Messrs. Jagtap & Khilari on this canal and lately named
the "Changdeo Sugar Factory".
3. In view however of the orders issued
verbally by the Hon'ble Minister, Public Works Department on 12-7-1939 the
applicant is being allowed to concentrate all his cane irrigation to the extent
of 100 acres on the tail outlet of Dy 17 of the Godavari Right Bank Canal by
15-21940 and to continue it permanently there if he so wishes provided he
agrees to take water by measurement on volumetric basis of 112" at the
outlet head and pay the water rates that may hereafter be sanctioned by
Government in this respect. The applicant has since signified his willingness
to these conditions.
He will be charged, till then on the area
basis as is done at present.
4. The area thus allowed to the applicant
will be excluded from the Sugar Factory area while 991 fixing the boundaries of
the allotted factory area of the "Changdeo Sugar Factory" on this
canal. D.A. Marathi petition.
(Sd.) W. H. E. GARROD, Superintending
Copy, with compliments, to the Executive
Engineer, Nasik Irrigation Division, for information and guidance with
reference to the correspondence ending with this office No.
3686 dated 22-6-1939.
Exhibit D-68 is a letter written by the
Superintending Engineer to Karale. It reads :
No. 4224 of 1939 Poona, 14th July 1939.
TO Shankar Tukaram Karale, Esquire, at
Continuation of cane irrigation on
Distributary No. 17 of the Godavari Right Bank Canal.
Dear Sir, In continuation of this office No.
3686 dated 23rd June 1939, I have to inform you that under orders of the
Honourable Minister, Public Works Department, you will be allowed to irrigate
came to the extent of 100 acres on the tail outlet of Distributory No. 17 of
the Godavari Right Bank Canal permanently, so long as you may wish to do so, on
condition that you agree to take canal water by measurement on volumetric basis
of 112" depth at the outlet head at the rate which may be sanctioned by
(2) This will apply to new cane plantation
from 15-2-1940 onwards. Till then, you may continue your cane irrigation on
outlets 2 and tail as at present.
Yours faithfully, (Sd.) W. H. E. Garrod,
Superintending Engineer, Deccan Irrigation Circle.
992 Copy, with compliments, to the Executive
Engineer, Nasik Irrigation Division, for information.
A fair reading of these two documents leaves
no room for doubt that a firm agreement was entered into between the Government
and Karale in respect of the supply of water to his land to the extent of 100
acres on the tail outlet of Distributary No. 17 of the Godavari Right Bank
Canal. These two letters show that there was previous correspondence between
the Engineering Department and Karale and that the Minister of Public Works Department
intervened and settled the terms of the agreement, and that the terms were
communicated to Karale, who accepted the same. The terms of the agreement were,
(i) Karale was allowed to concentrate all his cane irrigation to the extent of
100 acres on the tail outlet of Distributary No. 17 of the Godavari Right Bank
Canal by February 15, 1940, and to continue it permanently, if he so wished;
(ii) Karale agreed to take water by measurement on volumetric basis of
112" at the outlet head and to pay water rates that might thereafter be
sanctioned by the Government in that respect; (iii) the said area will be
excluded from the sugar factory area while fixing the boundaries of the
allotted sugar factory area of Changdeo Sugar Factory; and (iv) the terms will apply
to new cane plantation from February 15, 1940 onwards. It is said that the word
"permanently" refers to cultivation, but not to supply of water. This
interpretation makes the entire contract meaningless. Sugar cultivation can be
done only with the permission of the department, for sugarcane crop cannot be
raised without supply of water from the canal.
When the Superintending Engineer allowed
Karale to concentrate all, his cane irrigation in the said area permanently on
condition he paid the prescribed rates, it was necessarily implied in the said
agreement that he would supply water permanently, if the said rates were paid.
Cultivation and supply of water are so
inextricably connected that one cannot be separated from the other. The
permission to have cane irrigation permanently on the basis of a particular
rate implies that the supply for irrigation is co-terminous with irrigation. In
this view we must hold that Exs. D-67 and D-68, read together, record a
concluded 993 agreement between the Superintending Engineer, acting on the
orders of the Minister of Public Works Department, on the one hand and Karale
on the other, agreeing to supply water so long as Karale had cane cultivation
in the cons centrated area. The other documents, read along with the documents
filed for the first time in the High Court, also do not detract from this
conclusion. Exhibit D-78. which is not dated, was the application filed by
Karale to the Chief Minister, P.W.D. and Irrigation Department, Bombay. Therein
Karale represented to the Chief Engineer that Distributary No. 17 was
permanently closed prior to 1935, that he was responsible for starting the said
Distributary by commencing plantation. that the "Prime Minister's"
consent gave him an assurance that while declaring the factory area, the area
of the previous gardeners would be excluded from the said area, that he had
invested a capital of about Rs. 75,000/for raising the plantation and that in
the circumstances he prayed that while declaring the factory area, his land
should be excluded therefrom. This application was considered by the concerned
office under G.L. No. 3033/36 dated April 27, 1939. In the note put up by the
office the contents of the ;said application are summarized.
Thereafter the following note is found :
"With reference to the H.M.R.D.'s note
dated 3-4-1939 it may be observed that Government has already accepted the
principle that no ordinary irrigators should be allowed to operate in the sugar
factory area. Under the general orders issued on the subject owner irrigators
are to be allowed to continue irrigation, on yearly basis. It is for
consideration whether this fact may be brought to the notice of the H.M.R.D. If
it is decided to do so the papers may be submitted to the H.M., P.W.D. and the
H.M.R.D. after the drafts put up are issued." The Revenue Minister
accepted the endorsement. This is only an office note and the suggestion that
the irrigators should be allowed to continue on the yearly basis was only to
prevent further applications after the factory area was declared. This
endorsement had nothing to do with the 134159 S.C.-63 994 exclusion of any
particular area from the sugar factory area. The endorsement "should
see" below the endorsement made by the Revenue Minister perhaps meant that
the papers, should be submitted to the Minister concerned. Exhibit D-79 is a
letter written by the Deputy Secretary to the Government of Bombay to Changdeo
Sugar Mills. This letter also refers to the office endorsement No. 3033/36-1.
Though we are not directly concerned with this letter, it may be mentioned that
the application of Karale is connected with the proposal to declare certain
area as factory area and to give water to Changdeo Sugar Factory in respect of
the lands in that area, for his application was to exclude his area from the
factory area. Both the matters obviously were dealt together. Exhibit D-79A is
again part of the file relevant to the factory area. But a reference is made
again to the office No. 3033/36-1 and in the same file Karale's letter is also
noticed. Exhibit D-81 is an endorsement at page 133 of the same file, which
also deals with the subject' sugar factories". It contains a copy of the
letter written to the Superintending Engineer requesting him to submit at a
very early date a draft agreement for the supply of water to the company's area
on the Godavari Right Bank Canal on the terms embodied in the margin thereof.
Exhibit D-82 is also another endorsement on the same file. The endorsement
reads thus :
Endorsement at 191.
3033/36 1114 Discussed with the Secy.
In addition to his written requests, Mr.
Karale had also interviewed the late H.M.R.D. During the discussions, H.M.
had made it clear that Mr. Karale can only be
allowed to continue if he was willing to consolidate his holdings in an
independent block so that the Co.'s cultivation be carried on undisturbed.
This is not recorded on this file as H.M. did
not pass any orders in Bombay or at the Secretariat but instructed 995
(Presumably after discussion with Mr. Sule) the S.E.D.I.C.
in the matter.
Please see P. 107 ante. That Mr. Karale's
cane has to be shifted to one block is clear from the wordings of the S.E.S.
letter. "The applicant is allowed to concentrate all his cane........ on
the tail outlet of D. 17". This is the only record of the orders passed.
Moreover Mr. Karale is to have his supply on
a volumetric basis as soon as that can be arranged for. This would necessitate
the concentration of his cane areas." This endorsement notices the
contents of Ex. D-67 and, therefore, it must have been made only after April
The said documents do not carry the matter
further. They only show what we have already noticed, namely, the Government
wanted to create a factory area and that Karale filed an application to have
his area excluded therefrom. The notings of the department are not in any way
inconsistent either with Ex. D-67 or with Ex. D-68. Exhibits D-67 and D-68
refer to Office No. 3686 dated June 23, 1939, and that letter must have been in
some other file and that file was not produced and, if produced, it might have
thrown some more light. In the circumstances we must proceed on the basis that
Exhibits D-67 and D-68 embodied the terms of the agreement entered into between
the Government and Karale pursuant to the application, Ex. D-78, made by him to
the Chief Engineer, P.W.D. We have already held that the said documents record
the completed agreement between the Government and Karale in respect of supply
of water to his and.
Even so, the question arises whether the said
agreement is enforceable, if it has not complied with the provisions of s.
175(3) of the Government of India Act, 1935. The premises on which Mr. Nambiar
built his argument is that the said agreement was entered into between the
parties under the provisions of the Act. If it was not made under the
provisions of the Act, but outside the Act, the foundation for this argument
would disappear. We would, therefore.
proceed to consider now whether the said
agreement was under the provision of the Act.
996 The relevant provisions of the Act may
now be read. Section 3(6) defines "Canal-Officer" to mean any officer
lawfully appointed or invested with powers under section 4. Under s. 4, such
officer can exercise powers and discharge duties that may be assigned to him by
the State Government. It is said that the Superintending Engineer was one of
the officers so appointed by the Government and that the powers under ss. 27 to
30 of the Act were assigned to him. Under s. 27, "Every person desiring to
have a supply of water from a canal shall submit a written application to that
effect to a Canal-Officer duly empowered to receive such applications, in such
terms as shall from time to time be prescribed by the State Government in this
behalf". Under s. 29, "When canal-water is supplied for the
irrigation of one or more crops only the permission to use such water shall be
held to continue only until such crop or crops shall come to maturity, and to
apply only to such crop or crops". Under s. 30, "Every agreement for
the supply of canal-water to any land, building or other immovable property
shall be transferable therewith, and shall be presumed to have been so
transferred whenever a transfer of such land, building or the other immovable
property takes place." But under the second limb of the section,
"except in the case of any such agreement as aforesaid, no person entitled
to use the water of any canal, shall sell or sub-let, or otherwise transfer,
this right to such use without the permission of a Canal Officer duly empowered
to grant such permission". A combined reading of these provisions
establishes that every person desiring to have supply of water from a canal
shall apply in the prescribed manner to the Canal-Officer and that the person
to whom water is supplied cannot transfer his right to another without the
permission of the Canal Officer. But if the land in respect whereof the water
is supplied is transferred, the agreement for the supply of water also shall be
presumed to have been transferred along with it. The expression
"agreement" in s. 30 of the Act, it is contended, does not connote a
contract as understood in law, but only a convenient mode of expression to
indicate the sanction or permission given by the Canal-Officer. This meaning of
the expression "agreement" is sought to be supported by a reference
to the Bombay Canal Rules, 1934, made in 997 exercise of the powers conferred
on the State Government under s. 70(e) of the Act. Part 11 of the Rules deals
with supply of water. It provides for the filing of applications, the manner of
their disposal and. the persons entitled to dispose of the same, and also the
mode of supply of water for cultivation of different crops. The forms
prescribed columns under different heads for giving the necessary particulars.
The forms contain the instructions as well as conditions on which permission
will be granted.
Rule 7 says that an application for supply of
water for the irrigation of land for any period may be sanctioned, indicating
thereby that there is no maximum period fixed for which application for supply
of water can be made. Assuming without deciding that "agreement"
under s. 30 of the Act means only sanction, the Act and the Rules provide for
an application to be made to the Executive Engineer, who, subject to. the
Rules, can give the sanction. Rule 36 provides for an appeal from the order of
the Executive Engineer to the Superintending Engineer, and from that of the
Executive Engineer's order under r. 18 or r. 19 to the Collector. But there is
no provision either in the Act or in the Rules made there under enabling any
party to make an application to the Chief Engineer to exclude his land from
factory area, and to give him supply of water for irrigating the said land
permanently, or a power to the Government to enter into an agreement or make an
order in respect of such an application. Such an order or agreement is entirely
outside the scope of the Act or the Rules made there under.
We are not called upon in this case to decide
whether the Government has any such power outside the Act; but, we shall assume
for the purpose of this case that it has such power and to proceed to consider
the legal arguments on that basis.
The documentary evidence adduced in this
case, which we have already considered, discloses that the application was made
to the Chief Engineer; that the Government, through the relevant ministry,
considered the application and that on the instructions given by the concerned
Minister, the Superintending Engineer wrote the letter Ex. D-68 to Karale. It
was, therefore, in effect and substance, an agreement entered into between the
Government and Karale.
998 Such an agreement fell outside the
provisions of the Act.
The parties to the agreement also understood
that it was an agreement made between the Government and Karale. The Government
in or about February 1942 sent a draft agreement to Karale for execution
regarding the supply of canal water to his farm, but the said Karale did not
execute the agreement. The parties did not agree in regard to some of the
conditions found in the draft, but Karale did not contest the position of the
Government that a formal agreement in compliance with the provisions of law was
Again during the continuance of the
partnership between Karale and the appellant, in or about 1950, the Government
of Bombay sent another draft agreement to the said Karale for execution. Though
Karale signed the agreement, he insisted upon a proviso that the agreement
should be without prejudice to the permission already granted to him. The
Bombay Government did not execute the said agreement. So too, Karale and the
appellant were making yearly applications under the Act and getting supply of
water to their plantation. That procedure was presumably followed because,
though there was an agreement between Karale and the Government, for one reason
or other, a formal document, though intended to be executed, was not executed.
This conduct on the part of the Government as well as that on the part of
Karale and the appellant also establishes that the agreement was not under the
Act, but between the Government of Bombay and Karale. If so, it follows that
the contract entered into between the Government and Karale was a contract made
in the exercise of the executive authority of the Province within the meaning
of s. 175(3) of the Government of India Act, 1935. The relevant part of s. 175(3)
of the Government of India Act, 1935, read :
"All contracts made in the exercise of
the executive authority of a Province shall be expressed to be made by the
Governor of the Province ...... and all such contracts and all assurances of
property made in the exercise of that authority shall be executed on behalf of
the Governor by such persons and in such manner as he may direct or authorise.
999 This section laid down two conditions for
the validity of such a contract, namely, (i) it should be expressed to be made
by the Governor of the Province, and (ii) it should be executed on behalf of
the Governor by such persons and in such manner as he might direct or
authorize. We have nothing on the record to disclose whether the Superintending
Engineer, though he acted under oral instructions of the Minister, was
authorized by the Governor or under relevant rules to enter into such a
contract. That apart, even if Exs. D-67 and D-68 together were treated as
forming part of a contract entered into between the Government and Karale, can
it be said that the said contract was expressed to be made in the name of the
Governor? Ex facie it cannot be said so. But it is contended that on a liberal
construction, which we should adopt in a case where the Government is trying to
go back on its solemn promise, such a formality can easily be read into the
said documents. Before we construe the said two documents in order to ascertain
whether such a formality has been complied with or not, it would be convenient
to notice some of the decisions of this Court. The question of construction of
s. 175(3) of the Government of India Act, 1935, directly arose for decision in
Seth Bikhraj Jaipuria v. Union of India(1). There, the Divisional
Superintendent, East Indian Railway, placed certain orders with the appellant
for the supply of foodgrains for the employees of the said Railway. The orders
were not expressed to be made in the name of the Governor -General and was not
executed on behalf of the Governor General as required by s. 175(3) of the
Government of India Act, 1935. They were signed by the Divisional
Superintendent either in his own hand or in the hand of his Personal Assistant.
This Court held that the contracts, not having been expressed to be entered
into by the ,GovernorGeneral and not having been executed on his behalf, were
void. This Court held that the provisions of s. 175(3) of the Government of
India Act, 1935, were mandatory and, therefore, the contracts were void. This
decision was followed by this Court in New Marine Coal Co. v. The Union of
India(2). Reliance is placed by the (1)  2 C.R. 880. (2)  2 S.C.R.
1000 learned counsel for the appellant on the
decision of this Court in Union of India v. Rallia Ram (1) in support of his
contention that though ex facie Exs. D-67 and D-68 do not show that the
contract was expressed to be made in the name of the Governor, the said fact
could be inferred from the recitals. There, the goods offered to be sold
belonged to the Government of India. A tender notice was issued by the
Government of India, Department of Food (Division 111), in the name of the
Chief Director of Purchases. The Chief Director of Purchases agreed to sell the
goods on certain conditions to the respondent and incorporated them in the
acceptance note, which was also headed "Government of India, Department of
Food (Division III), New Delhi". The general conditions of contract, which
accompanied the letter of acceptance, defined Government as meaning the
GovernorGeneral for India in Council. On the said facts this Court held that
the correspondence between the parties ultimately resulting in the acceptance
note amounted to a contract expressed to be made by the Government and,
therefore, by the Governor-General, "because it was the Governor-General
who invited tenders through the Chief Director of Purchases and it was the
Governor-General who, through the Chief Director of Purchases, accepted the
tender of the respondent subject to the conditions prescribed therein".
Though in the acceptance note it was not expressly stated that the contract was
executed on behalf of the Governor-General, on a fair reading of the contents
of the letter in the light of the obligations undertaken there under, it was
held that the contract was executed on behalf of the Governor-General.
This decision does not depart from the
principle accepted in Seth Bikhraj Jaipuria's case(2). On a fair reading of the
correspondence this Court construed that the contract was entered into on
behalf of the Governor-General and expressed to be made in his name. Can it be
said that in the present case Exs. D-67 and D-68 disclose that the
Superintending Engineer was authorized to enter into a contract of the nature
mentioned therein on behalf of the Provincial Government and that the contract
was expressed to be made in the name of the Governor? (1)  3 S.C.R. 164.
(2)  2 S.C.R. 880.
1001 Nothing has been placed before us to
establish that the Superintending Engineer was legally authorized to enter into
such a contract on behalf of the Government; nor do the documents ex jacie show
that the agreement was expressed to be made in the name of the Provincial
Government. The letters mentioned the name of the Minister of the Public Works
Department and also the Government, in the context of the rates that might be
fixed thereafter, but the said documents did not purport to emanate from the
Governor. At best they were issued under the directions of the Minister.
We find it difficult to stretch the point
further, as such a construction will make the provisions of s. 175(3) of the
Government of India Act, 1935, nugatory. We cannot, therefore, hold that either
the contract was entered into by the person legally authorized by the
Government to do so or expressed to be made in the name of the Governor. The
agreement is void, as it has not complied with the provisions of s. 175(3) of
the Government of India Act, 1935.
In this view, it is not necessary to express
our opinion on other interesting questions raised in this case.
In the result, the appeal fails and is
dismissed, but in the circumstances, without costs.