# UNION OF INDIA v. SURJIT SINGH ATWAL

- **Citation:** [1979] 2 S.C.R. 1002
- **Court:** Supreme Court of India
- **Decided:** 1979-01-18
- **Bench:** R. S. Sarkar!A, 0. Chinnappa Reddy
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/union-of-india-v-surjit-singh-atwal-7555
- **Pages:** 5

## Headnote

Ffear-Plea of 11on-con1plia11ce with the prvvi_\i,_ins of Section 175\3) of
the Govt. of India Act, 1935 is a n1ixed plea of fact and law-A plea not having hf'f.12 so pleaded in the. writtl'll state111ent and any
i.1·.11u' not having been
so rai.1cd with regard to it, cannot be allowed later.
Pleadings-Denial of a contract-Civil I'rocedure Code, 1908 (Act V of
1908), Order VI Rule 8 and Order Vl/l Rule 2 scope of.
The respondent-plaintifI undertook the construction of a hard Runway, taxi
tracks and dispersal roads at Dalbhumghar Aerodrome, pursuant to a formal
\Vritten agreement with appellant.
The respondent completed the work.
At a
subsequent conference, it \Vas agreed that the total amount of the final bill
prepared in accordance \vi th the agreed rates less a sum of Rs. 50,000 /- should
be paid forthwith and the balance of Rs. 50,000/- should be paid two weeks
thereafter.
On the appella.nt's failur'e to make the payme\1t of Rs. 50,000/-,
the respondent filed a suit on the original side of the High Court of Calcutta
to recover the said sum together with interest.
The suit was dismissr-0 by a
single judge but on appeal, the Division Bench of the High Court allowed the
appeal and decreed the suit.
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Dismissing the appeal by certificate, the Court,
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HELD: 1. A plea of non-compliance with the provisions of Section 175(3}
of the GoverTJment of India Act, 1935 is a· mixed plea of fact and law. [1006 B]
2. The plea of illegality of an agreement. not having been so pleaded in
the \vrilten statement and no issue having been raised
\Vith
regard
to
it
cannot be allowed lf,1·ter.
To permit such a plea to be raised several years
after the institution of the suit would greatly prejudice the plaintiff.
If such
a plea had been raised, in the instant case, at th'e appropriate stage, the respondent-plaintiff might have come out with a suitable answer.
He might have
had his ov.rn pleadings amended either by seeking to rest his case on the original
agreement or under Section 65 or 70 of the Contract 1\ct. f1005 G-H, 1006 A]
3. The illegality of a contract must be specifically pleaded as much as the
denial of a contract.
Under Order VJ, Rule 8 of C.P.C., where a contract is
alleged in any pleading, a bare denial of the· ~nrn~ by the opposite party ~hall
ba construed only as a denial in fact of the express contract alleged or of the
matters of fact from which the same may be implied, and not as a denial of
the legality or sufficiency in law of such contract.
And, under Order VTIJ,
Rule 2 C.P.C., the defendant must raise by the pleading all matters which show
the suit not to be maintainable or that the transaction is either void or voidable ;n noint of law. [1006 B-Dl
Kalyanpur Lhne Works Ltd. v. State of Bihar and Anr. [1954] S.C.R. 958:
referred lo.
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UNION v. s. s. ATWAL (Chinnuppa Reddy, J.)
1003
CtVIL APPELLATE JURISDICTION : Civil Appeal No. 2053 of 1969.
From th,, Judgment and Decree dated 16-7-68 of the Calcutta High
Court in Appeal No. 199-A of 1964.
R. B. Bhatt, E. C. Agarwala and Girish Chandra for the Appellant.
H. B. Datar and Ashok Grover for the Respondent.
The Judgment of. the Court :was delivered by
CHINKAPPA REDDY, J.-Not content with raising a false plea,
the
appellant, Union of India has preferred this appeal on a technical ground.
The respondent-plaintiff undertook the construction of a hard Runway,
Taxi tracks and dispersal roads at Dalbhumghar Aerodrome. There was
a formal written agreement between the parties
(Agreement
No :
A-Vll/96 of 1944-45).
The respondent completed the work in 1945.
The agreement provided for the work to be done "with stone at site".
As no stone was available at the site, stone had to be obtained by blast•
ing a rock in a hillock. The rates stipulated in the agreement were on
the basis that stone was available at site and not on the basis that stone
had to be obtained by blasting rock.
Some of the rates, therefore, required revision.
There was a conference between the parties in

## Text

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1002
UNION OF INDIA
v.
SURJIT SINGH ATWAL
January 18, 1979
[R. S. SARKAR!A AND 0. CHINNAPPA REDDY, JJ.J
Ffear-Plea of 11on-con1plia11ce with the prvvi_\i,_ins of Section 175\3) of
the Govt. of India Act, 1935 is a n1ixed plea of fact and law-A plea not having hf'f.12 so pleaded in the. writtl'll state111ent and any
i.1·.11u' not having been
so rai.1cd with regard to it, cannot be allowed later.
Pleadings-Denial of a contract-Civil I'rocedure Code, 1908 (Act V of
1908), Order VI Rule 8 and Order Vl/l Rule 2 scope of.
The respondent-plaintifI undertook the construction of a hard Runway, taxi
tracks and dispersal roads at Dalbhumghar Aerodrome, pursuant to a formal
\Vritten agreement with appellant.
The respondent completed the work.
At a
subsequent conference, it \Vas agreed that the total amount of the final bill
prepared in accordance \vi th the agreed rates less a sum of Rs. 50,000 /- should
be paid forthwith and the balance of Rs. 50,000/- should be paid two weeks
thereafter.
On the appella.nt's failur'e to make the payme\1t of Rs. 50,000/-,
the respondent filed a suit on the original side of the High Court of Calcutta
to recover the said sum together with interest.
The suit was dismissr-0 by a
single judge but on appeal, the Division Bench of the High Court allowed the
appeal and decreed the suit.
E
Dismissing the appeal by certificate, the Court,
F
G
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HELD: 1. A plea of non-compliance with the provisions of Section 175(3}
of the GoverTJment of India Act, 1935 is a· mixed plea of fact and law. [1006 B]
2. The plea of illegality of an agreement. not having been so pleaded in
the \vrilten statement and no issue having been raised
\Vith
regard
to
it
cannot be allowed lf,1·ter.
To permit such a plea to be raised several years
after the institution of the suit would greatly prejudice the plaintiff.
If such
a plea had been raised, in the instant case, at th'e appropriate stage, the respondent-plaintiff might have come out with a suitable answer.
He might have
had his ov.rn pleadings amended either by seeking to rest his case on the original
agreement or under Section 65 or 70 of the Contract 1\ct. f1005 G-H, 1006 A]
3. The illegality of a contract must be specifically pleaded as much as the
denial of a contract.
Under Order VJ, Rule 8 of C.P.C., where a contract is
alleged in any pleading, a bare denial of the· ~nrn~ by the opposite party ~hall
ba construed only as a denial in fact of the express contract alleged or of the
matters of fact from which the same may be implied, and not as a denial of
the legality or sufficiency in law of such contract.
And, under Order VTIJ,
Rule 2 C.P.C., the defendant must raise by the pleading all matters which show
the suit not to be maintainable or that the transaction is either void or voidable ;n noint of law. [1006 B-Dl
Kalyanpur Lhne Works Ltd. v. State of Bihar and Anr. [1954] S.C.R. 958:
referred lo.
•
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•
•
•
,
•
•
•
UNION v. s. s. ATWAL (Chinnuppa Reddy, J.)
1003
CtVIL APPELLATE JURISDICTION : Civil Appeal No. 2053 of 1969.
From th,, Judgment and Decree dated 16-7-68 of the Calcutta High
Court in Appeal No. 199-A of 1964.
R. B. Bhatt, E. C. Agarwala and Girish Chandra for the Appellant.
H. B. Datar and Ashok Grover for the Respondent.
The Judgment of. the Court :was delivered by
CHINKAPPA REDDY, J.-Not content with raising a false plea,
the
appellant, Union of India has preferred this appeal on a technical ground.
The respondent-plaintiff undertook the construction of a hard Runway,
Taxi tracks and dispersal roads at Dalbhumghar Aerodrome. There was
a formal written agreement between the parties
(Agreement
No :
A-Vll/96 of 1944-45).
The respondent completed the work in 1945.
The agreement provided for the work to be done "with stone at site".
As no stone was available at the site, stone had to be obtained by blast•
ing a rock in a hillock. The rates stipulated in the agreement were on
the basis that stone was available at site and not on the basis that stone
had to be obtained by blasting rock.
Some of the rates, therefore, required revision.
There was a conference between the parties in November, 194 7.
On the side of the Government the Superintending Engineer, the Executive Engineer and the Deputy Accountant General
were present. In respect of fourteen items of work the old rates were
not altered.
In respect of ten items of work only the rates were altered.
Out of these ten items, rates were substantially increased for nine
items but slightly decreased lot one item.
The rates agreed between
the parties at the conference were the very rates which had been previously fixed by a Government Engineer named Ramani Roy and 'suggested to the plaintiff by the Superintending Engineer for his acceptance.
The plaintiff initially objected to the rates but withdrew his objections
at the conference.
It was agreed that the total amount of the final bill
prepared in accordance with the agreed rates, less a sum of Rs. 50,000/-,
should be paid forthwith and the balance of Rs. 50,000 / should be paid
two weeks thereafter.
As agreed the amount of the final bill, less
Rs. 50,000/-, was paid but not the sumo( Rs. 50,000/-.
The sum of
Rs. 50,000/- was not paid despite repeated demands by the plaintiff.
The plaintiff therefore, filed suit No. 531 of 1951 on the original side
of the High Court of Calcutta on 24th January, 1951 to .recover the
sum of Rs. 50,000/- together with interest.
In the plaint, as filed originally, the plaintiff stated that it was agreed
that the work should be done by the plaintiff on the terms and conditions
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SUPREME COURT REPORTS
[1979] 2 S.C.R.
mentiGned in certain letters that passed between the parties.
No re.
ference to the written agreement was initially made in the plaint but by a
later amendment reference was also made to the agreement No. A-VII/
96.
1 he plaintiff further state<) in the plaint that after the completion
of the work there was a conference in November, 1947 at Calcutta and
an agreement was arrived at between the parties regarding the ra 'es at
which the plaintiff was to be paid for the work executed by him.
He
claimed that in accordance with the terms of the agreement arrived at in
November, 1947, he had yet to be paid a· sum of Rs. 50"000/-.
As we said earlier, the 'suit was filed on 24th January, 1951.
The
defendant, Union of India, filed a written statement on 1st February,
1956, five years after the filing of the suit.
The contract for
the execution of the work was admitted.
The completion of the
work was admitted.
The conference alleged by the plaintiff to
have been held in November 1947 was denied.
The agreement said
to have been arrived at the conference was also denied.
These denials
have been found to be false by the Courts below and the learned Counsel
for the appellant had to admit before, us that the denial was 'unfortunate'.
It is u matter not merely of surprise but of shock to us that such a blatant
false plea should have been raised by a Government in solemn proceedings before Court of law.
Far from setting an example as an ideal litigant, we notice that such false and untenable pleas are often raised on
behalf of the Government.
This is a matter which needs looking into
by the authorities that are concerned with it and we earnestly hope that
some suitable remedial action will be taken to avoid ·such pleas.
To
continue the story, no plea was taken in the written statement that the
contract between the parties was hit by any failure to comply with the
provisions of Section 175(3) of the Governmeut of India Act, 1935.
More than a dozen years after the institution of the suit and eight
years after the filing of the written statement, an application for amendment of the written statement was filed on 25th April, 1964, to enable
the defendant to raise the plea that the contract was hit by the failure to
comply with the provisions of Section !75(31 of the Govt. of India
Act. J 935.
The application was dismissed on 1st May, l 964, but it
was observed that the defendant was entitled to raise the plea sought to
be raised by the amendment even without an amendment. Thereafter
the suit proceeded to trial. Mr. Justice Mallick who tried the case decided in favour of the plaintiff on the several questions of fact which
were raised.
A question regarding compliance with the provisions of
Section 80 Civil Procedure Code was also decided in favour of the
plaintiff. He, however, held that the suit was based not on Agreement
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UNION v. s. s. ATWAL (Chinnappa Reddy, I.)
I 005
No. A-VII/96 of 1944-45 but on the agreement arrived at between the
parties in November, 1947, that this agreement was bad for non compli1nce wit!: the requirements of Section 17 5 ( 3) of the Govt. of India
Act 1935, and that the suit had, therefore, to be dismissed. On the
basis of the finding that the 1947 agreement .-ms bad for non compliance
with the requirements of Section 175(3) o: the Govt. of India Act,
l 935, the learned Judge also held that the Court had no jurisdiction to
entertain the suit. The suit wai accordingly dismissed.
On appeal, a
Division Bench of the Calcutta Bigh Co•irt consisting uf A. N. Ray and
S. K. Mukherjee, JJ., held that the defendant not having pleaded in the
written statement that the cont"act contravened the provisions of Section 175(3) of the Government of India Act there being no issue with
regard to Section 175(3), the learned Single Judge was wrong in entertaining such a plea, at that belated stage. It was observed that the
request for amendment of the written statement was made thirteen years
after the institution or the suit and that the plaintiff was greatly prejudiced by such a plea being entertained.
ft was also held by the
Division Ber.ch that there was no new egreement in November i947.
All lrat was done in November 1947 was to settle the rates for "additional or substituted work" as provided in clauses 12 and 12-A of the
original agreement.
In view of their conclusion that the plea regarding
the invalidity of the agreement should not have been entertained by the
learned single Judge, !he Division Bench ldd that the Calcutta High
Court had jurisdiction to entertain the suil.
The appeal was allowed
a11d a decree was granted for Rs. 50,000/- with interest from the date
of judgment.
The Union of India has preferred this appeal pursuant
to a certificate granted under Article 133(1) (a) of the Constitution of
India (as it stood prior to the 30th amendment) .
5hri Bhatt, learned Counsel for the appella'nt submitted that the suit
was bscd on the agreement of N ovemkr, 194 7 and that this agre-ement was void as the provisions of Section 175(3) of the Govt. of
India Act, 1935, were not complied with. We do not prima facie agree
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th"t the suit was based on any agr2ement arrived at in November 1947.
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We do not, however, desire to go into the question as we are satisfied
that the Appellate Court was right in holdi'ng that the defendant wa,>
not entitkd to raise the plea of illegality of the agreement, not having
so pleaded in the written statement and not having raised anv issue
with regard to it.
We agree with the learned Judges of the c·alcutta
High Court that to permit such a plea to be raised several years after
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the institution of the suit would greatly prejudice the plaintiff. If such
a pleJ had been raised at the appropriate stage, the plaintiff might have
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SUPREME COURT REPORTS
(1979] 2 S.C.R.
come 0ut with a suitable a"nswer.
Ho might have had his own pleadings amended either by seeking to rest his case on the original agreement or under Section 65 or Section 70 of the Indian Contract Act. W•"
do not wish to speculate on the possible alternate cases which the
plaintiff might have put forward had the plea be•en raised.
We only
wish to observe that the plea that the provisions of Sectio"n 175(3)
of the Govt. of India Act had not been complied with is a mixed plea
of fact and law.
We furth•cr agree with the view expressed by the
learned Judges of the Calcutta High Court that the illiega:ity of a contr~ct must be specifically pleaded as much as the denial of a contract.
Order VI, Rule 8 provides that where a contract is alleged in
any
pleading, a bare denial of the same by the oppooite party shall be construed only as a denial in fact of the express contract all•cged or of the
matters of fact from which the same may be imp:ied, a"nd not as a denial
of the legality or sufficiency in law of such contract. Order VIII, Rulo
2 Civil Procedure Code pn:scribes that the defendant must raise by his
pleading all matters which show the suit not to be maintainable, or that
the transaction is either void or voidable in point of law. In Kalyar,pur
Lime Works Ltd. v. State of Bihar and Anr.,(') the Supreme Court reverned the judgment of the High Court on the grou"nd that the High
Court was not justified in allowing to be raised at the time of argument
the question whether there was a contravention of Section 30 of the
Govt. of India Act 1915. Reliance was placed upon Ord•cr VI, Rule
8 and Order VIII, Rule 2 of the Civil1 Procedure Code 1908. We are,
therefore, of the view that the Division Bench of the High Court wa'
right in holding that the lear'ned single Judge was not justified in per·
mitting the defendant to take up the plea that the contract was hit by
the failure to comply with the requirements of Section 175(3) of lhc
Govt. o: lndia Act. In the result the app~al is dismissed with costs.
S.R.
Appeal dismissed,
(1) [1954] S.C.R. 958.
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