John Beaumont, Kt., C.J.@mdashThis is a suit by the Secretary of State for India in Council asking for specific performance of an agreement to
grant a lease to the defendant.
2. The defence is that the contract relied on by the plaintiff was not made in accordance with Section 30 of the Government of India Act, 1915.
3. I will refer first of all to the terms of that section before considering whether the contract relied on complies with the provisions of the section.
We have to deal in this case with a contract and not with an assurance, and Section 30, so far as it is material for the present purpose, provides :-
...any local Government may, on behalf and in the name of the Secretary of State in Council,... sell and dispose of any real or personal estate
whatsoever in British India, within the limits of their respective Governments, for the time being vested in His Majesty for the purposes of the
Government of India, or raise money on any such real or personal estate by way of mortgage,... and make proper assurances for any of those
purposes, and purchase or acquire any property in British India within the said respective limits, and make any contract for the purposes of this
Act.
Sub-section (2) provides-
Every assurance and contract made for the purposes of Sub-section (i) of this section shall be executed by such persons and in such manner as the
Governor-General in Council by resolution directs or authorises, and if so executed may be enforced by or against the Secretary of State in
Council for the time being.
It is not disputed that by a resolution of the Governor General in Council the proper officer to execute the contract in this case is the Collector of
Bombay. So that what we have to find is a contract by the local Government made on behalf and in the name of the Secretary of State for India in
Council, and executed by the Collector of Bombay.
4. The contract relied on is contained in correspondence between the Collector of Bombay and the defendant, or his attorneys, which commences
in October, 1923. At that date the defendant was entitled to a lease of the property in question from the Secretary of State for India in Council for
a term of ninety-nine years from some date about 1895-the exact date is immaterial -and the defendant wanted to surrender that lease and obtain a
grant of a new lease on different terms. The correspondence starts with a letter from the Collector of Bombay dated October 5, 1923, in which he
says that he is prepared to recommend to Government a lease for 999 years on certain terms, and he says, ""Please note that this offer is subject to
the sanction of Government."" The correspondence then continued and the defendant made certain counter proposals, and with a letter of
December 6, 1923, the Collector agreed to certain modifications of the terms which up to then he had proposed, and forwarded with this letter a
copy of the form of lease, which would be granted, which form of lease is expressed to be made by the Secretary of State for India in Council as
lessor. Eventually terms were agreed between the Collector of Bombay and the defendant, and by January 24, 1924, all the terms were settled.
But throughout the correspondence it is made perfectly plain that the whole arrangement is subject to the sanction of Government. Then the
Collector wrote to Government, stating in his own language the terms which he had offered to the defendant and which had been accepted by the
defendant''s solicitors, and he recommended that Government sanction those terms. On August 11, 1924, Government passed a resolution in these
terms :-
The conversion of the existing lease to a new lease on the conditions mentioned in paragraph 5 of the Collector''s letter is sanctioned.
5. It is not disputed that the conditions mentioned in paragraph 5 of the Collector''s letter correctly set out the arrangement made between the
Collector and the defendant. On September 5, 1924, the defendant was informed that Government had sanctioned the arrangement, and the letter
giving that information was signed by an officer in the Collector''s office, and not by the Collector personally. In my view that fact has no relevance,
because the letter stating that the sanction of Government had been given did not itself form any part of the actual contract. It is a matter collateral
to the contract.
6. Now the way in which the Advocate General puts his case is this. These negotiations were carried on by the Collector as an agent for
Government; as soon as Government ratified the arrangement, the ratification dated back, u/s 196 of the Indian Contract Act, to the date of the
contract; and the contract having been signed by the Collector was a good contract within 3. 30 of the Government of India Act. I much doubt
myself whether Section 196, or the doctrine of ratification, has any application to the facts of this case. The Collector clearly had no authority to
enter into a contract to lease Government land, and in my view on the correspondence he never purported to do anything of the sort. What he was
really doing was arranging with the other side the terms which he was prepared to recommend to Government to accept, and I do ''not think that
any question of a binding contract arose until Government accepted the terms, and I think at that date it became necessary to frame a contract
complying with the provisions of Section 30. I see great difficulty in holding that a contract which had been signed before Government heard about
the matter at all could be a contract complying with the provisions of Section 30 of the Government of India Act.
7. However, assuming that the Advocate General''s argument is correct and that the doctrine of ratification applies, he is still in the difficulty that
there is no contract made in the name of the Secretary of State. The only reference to the Secretary of State is contained in the draft lease which
was sent with the letter of December 6, 1923. It seems to me plain that a mere statement that when the lease comes to be granted it will be granted
by the Secretary of State for India in Council does not make the contract to grant that lease a contract in the name of the Secretary of State in
Council, and on that ground alone, I think, the Government fail in proving that they have any contract which complied with Section 30.
8. I should have said that after 1924, when Government sanctioned the arrangement, nothing was done until 1930, when a draft of the proposed
lease was sent to the defendant. Probably the fact that the new rent was not to start till 1932 accounts for the delay. The defendant ultimately
refused to accept the lease on the ground that the value of property had gone down. His defence, therefore, is not conspicuous on merits.. But if he
can show that there is no contract complying with the terms of Section 30 of the Government of India Act, then his defence, whatever it may lack
in substantial merits, must prevail, and in my opinion the plaintiff has failed to show any such contract.
9. The learned Judge in the Court below says that he would have decided in favour of the plaintiff but for a decision of Mr. Justice Mirza in
Municipal Corporation of Bombay v. Secretary of State for India ILR (1932) Bom. 660 : 36 Bom. L. R. 568 the material passages being at pp.
707 and 708; in which the learned Judge held that a contract to comply with Section 30 of the Government of India Act must be evidenced by a
formal document in the nature of an indenture or deed to which the Secretary of State in Council is made a party and not merely by
correspondence. There is also a dictum of Mr. Justice Broomfield The Secretary of State for India Vs. Yadavgir Dharamgir, , wherein it is stated
that a deed executed on behalf and in the name of the Secretary of State is necessary in order to bring the contract within the terms of Section 30.
I can see no justification whatever for the suggestion that a contract in order that it may comply with Section 30 of the Government of India Act
must be by deed, i.e. under seal. There is no such provision in Section 30, as there is in Section 174 of the English Public Health Act of 1875,
which requires a contract by an urban authority for an amount over �50 to be under seal.
10. Whether a formal contract is necessary is a more doubtful question. No doubt the direction in Sub-section (2) of Section 30 that the contract
must be executed by the proper officer rather suggests a formal contract. The expression "" executed "" is not a very appropriate term to apply to the
process of signing letters. In any case I apprehend that if parties rely on a contract to be spelt out of a series of letters, it would generally be very
difficult to show that the contract complied with Section 30 of the Government of India Act, and obviously in a case to which that section applies
the parties would be wise in having a formal document inter partes. I do not wish, however, to bind myself to the proposition that in no case can a
contract comply with Section 30 unless it takes the form of a contract inter partes. It is possible that a contract in the form of letters, complying
with the provisions of Section 30 and signed by the proper officer would be a contract complying with the terms of the Act. However, it is not
necessary to decide that. In view of the judgment of the Court below, however, I think it is necessary to decide in this case that no deed is required
in order to bring a contract within Section 30,
11. As, in my opinion, the correspondence in this case does not amount to a contract on behalf of and in the name of the Secretary of State in
Council executed by the Collector of Bombay, the appeal fails and must be dismissed with costs.
Blackwell, J.@mdashTaking the correspondence beginning with the letter of October 5, 1923, and ending with the letter of January 24, 1924, as a
whole it appears to me that the Collector was not even making an offer on behalf of Government The letter of October 5, 1923, begins with a
statement by the Collector that he was prepared to recommend to Government a 999 years'' lease on the terms therein mentioned, and it ends by
stating that that offer was subject to the sanction of Government. In the letter of January 7, 1924, the Collector states that the case will be
submitted for their sanction in due course, and the reply from the defendant''s attorneys acknowledges the receipt of that letter, and that the case
was to be submitted to Government for their sanction in due course. These words seem to be entirely inappropriate if the Collector had been
purporting to make an offer on behalf of Government. The last letter of January 24, 1924, states that the Collector confirms all the terms contained
in the letter of December 21, 1923, subject to the sanction of Government. But this letter, of course, must be read with the letters immediately
preceding it in which the Collector has made it plain that he was really doing nothing more than indicating that he was prepared to recommend to
Government to sanction a lease on the terms finally agreed upon between him and the defendant''s attorneys. Consequently, in my view, no
contract had even been purported to be made by the Collector on behalf of Government up to January 24, 1924.
2. In order to be binding u/s 30 of the Government of India Act the contract must be made on behalf and in the name of the Secretary of State in
Council by the local Government. It seems to me that it would be impossible to take the view that this correspondence was being carried on by the
Collector in the name of and on behalf of the Government of India. It has been suggested by the Advocate General that that is the true inference to
be drawn from the correspondence by reason of the fact that with the letter of December 6, 1923, was enclosed a form of lease the terms of
which show that the lessor was to be the Secretary of State for India in Council. That fact does not in my opinion justify the inference which the
Advocate General seeks to draw. The correspondence, I think, merely amounts to this,-that the Collector was prepared to recommend to
Government to sanction a lease which if sanctioned would be made on behalf of and in the name of the Secretary of State in Council. If this be the
right view to take of this correspondence, there is an end to the plaintiff''s case for specific performance.
3. Even if the correspondence could be treated as an offer made by the Collector on behalf of Government, still in my opinion there would clearly
have been no concluded contract sufficient to satisfy Section 30 to which the sanction of Government had been obtained and communicated to the
defendant. A letter of September 5, 1924, which is not signed by the Collector, but by one v. H. Thakur on his behalf, is relied upon by the
Advocate General who contends that at any rate from the receipt of that document by the solicitors for the defendant there was a concluded
contract. In my opinion this contention fails. It had not been made plain up to that moment that there was any offer in the name of and on behalf of
the Secretary of State in Council. There is nothing in the letter of September 5, 1924, to indicate that the Government on behalf of and in the name
of the Secretary of State for India in Council are sanctioning the grant upon the terms and conditions contained in the previous correspondence.
Moreover, even if that letter could have been relied upon, it would in my opinion certainly have had to be signed by the Collector himself, the only
person authorised by resolution to execute a contract on behalf of the local Government, and not by a subordinate official on his behalf.
4. In Municipal Corporation of Bombay v. Secretary of State for India ILR (1932) 58 Bom. 660 : 36 Bom. L.R. 568. Mr. Justice Mirza in a
passage beginning at the bottom of p. 707 expressed the opinion that the contract contemplated by Section 30 of the Government of India Act
should be evidenced by a formal document in the nature of an indenture or deed to which the Secretary of State in Council is made a party and not
merely by correspondence. I am, with respect, quite unable to agree with the learned Judge that the section requires a formal document in the
nature of an indenture or deed. The words used in Sub-section (1) of Section 30 are quite general in terms and authorise the local Government on
behalf and in the name of the Secretary of State in Council to make any contract for the purposes of this Act. There is nothing in the section to
indicate that the contract is to take any particular form. Sub-section (2) of Section 30 requires the contract to be executed by such person and in
such manner as the Governor General in Council by resolution directs or authorises.. The use of the word ''executed'' no doubt does suggest that a
formal contract executed between the parties is required to be entered into. I am not however prepared to take the view that a formal contract of
this character is necessarily required. It seems to me that such a contract as is required by Section 30 might be entered into by letters provided that
it was plain that the correspondence was carried on on behalf of and in the name of the Secretary of State and that the contract as finally
concluded by correspondence was executed by a person authorised by resolution in that behalf.
5. For the above reasons I am of opinion that the plaintiff''s claim for specific performance in this case fails and this appeal must be dismissed with
costs.