C/FA/5383/1997 CAV JUDGMENT DATED: 07/04/2026

Reserved On : 18/03/2026

Pronounced On : 07/04/2026

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

R/FIRST APPEAL NO. 5383 of 1997

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JAYANTILAL HARGOVANDAS THAKKAR & ORS.

Versus

GRAM PANCHAYAT,RATANGADH & ANR.

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Appearance:

DECEASED LITIGANT THROUGH LEGAL HEIRS/ REPRESTENTATIVES

for the Appellant(s) No. 2,3

MS ARCHANA R ACHARYA(2475) for the Appellant(s) No.

1,3.1,3.2,3.3,3.4,3.5,3.6,3.7

MR.BHARAT VYAS AGP for the Defendant(s) No. 1

MR AJ YAGNIK(1372) for the Defendant(s) No. 1

NOTICE SERVED for the Defendant(s) No. 2

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CORAM:HONOURABLE MR. JUSTICE J. C. DOSHI

CAV JUDGMENT

1. By way of the present First Appeal under Section

96 of the Code of Civil Procedure, 1908 (for short the “Code”),

the appellants, who is the original plaintiffs, challenge the

judgment and decree dated 29.08.1997 passed by learned

Civil Judge (S.D.), Palanpur in Special Civil Suit No.45 of

1982, whereby the suit of the plaintiffs came to be dismissed

with costs.

2. For the sake of brevity and convenience, the

parties are referred to their original status and position to the

learned Trial Court.

3. The brief facts borne out at the record are that the

plaintiffs filed a suit against the defendants for permanent

injunction as well as damages for breach of contract. The case

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of the plaintiffs is that, Ratangadh Gram Panchayat, under the

permission of the Deputy Collector, accept the bid of plaintiffs

for cutting babool trees grown on land bearing Survey

No.269, admeasuring 174 acres, which is a Gauchar land. The

babool trees had grown on the said land was causing

interference for grazing bovine. An auction was held on

16.06.1981 after obtaining the opinion of the Forest Officer

and the Deputy Collector. The plaintiffs, being the highest

bidder with a bid of Rs.17,500/-, succeeded in securing the

right to cut the babool trees. The plaintiffs were informed vide

outward No.13 dated 19.07.1981 and was permitted to cut the

babool trees. The plaintiffs were required to complete the

necessary formalities, including execution of the agreement,

on or before 31.07.1982. According to the plaintiffs, in the

meantime, he received a notice from the Forest Office

restraining them from cutting babool trees on 20 acres of

land, which had been reserved for the purpose of a forest

station. Pursuant thereto, plaintiffs approached Ratangadh

Gram Panchayat, which in turn addressed a letter to the

Forest Department requesting to release of 20 acres of land

that had been handed over to the Forest Department in 1973

for expansion of forest area for a period of five years.

3.1 Since the said period for which forest department

was handed over the 20 acres land, had expired, the Gram

Panchayat requested the Forest Department to permit the

plaintiffs to cut babool trees on the said 20 acres of land.

However, the Forest Department did not grant such

permission. Thereafter, plaintiffs approached the learned Trial

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Court seeking a permanent injunction restraining the

defendants from interfering with their right to cut the babool

trees. Subsequently, the plaintiffs amended the suit and

claimed damages of Rs.5,27,000/- for breach of contract,

contending that they could not cut babool trees from the

entire land of Survey No.269.

3.2 The defendants were duly served. Defendant No.1-

Ratangadh Gram Panchayat, filed its written statement at

Exh.18, raising contentions that the Civil Court has no

jurisdiction to try and decide the suit and the suit is not in

proper form. The plaintiffs, being an unregistered partnership

firm, could not maintain the suit and no notice under Section

320 of the Gujarat Panchayats Act, 1961 (for short, “G.P. Act”)

has been issued prior to filing the suit. Therefore, the suit is

not maintainable. It is further contended that as per the terms

and conditions of the contract, the plaintiffs failed to cut the

babool trees even in other portion of Survey No.269 and had

themselves stopped the work on the illusionary ground that

the Forest Department had restrained them. It is also

contended that the plaintiffs were required to cut the babool

trees while leaving stumps of 2 to 2.5 feet, but in breach of

the terms and conditions, plaintiffs had deforested the trees.

Lastly, it is contended that the plaintiffs had given an

undertaking to the Forest Department that they would not cut

babool trees on the 20 acres of land under its possession.

Thus, claim of the plaintiffs in defiance of undertaking is

barred by principle of estoppel. Therefore, the plaintiffs are

not entitled to permanent injunction or damages for breach of

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contract.

3.2 The State Government also filed its written

statement, mainly contended that the suit is not maintainable

for want of notice under Section 80 of the Code, which is

mandatory. It is further contended that, by Resolution No.4,

20 acres of land from Survey No.269 had been handed-over to

the Forest Department for expansion of forest area, and since

the said land was in possession of the Forest Department, the

Gram Panchayat had no authority to grant permission to the

plaintiffs to cut babool trees on that portion of land.

Therefore, the plaintiffs claim is not maintainable. Upon the

aforesaid contentions, the State Government requested to

dismiss the suit.

3.3 The learned Trial Court framed issues at Exh.40

and, after permitting both parties to lead evidence, dismissed

the suit mainly on two grounds: firstly, the plaintiffs, being an

unregistered partnership firm, could not maintain the suit

against a third party in view of Section 69(2) of the

Partnership Act; and secondly, that notice under Section 320

of the G.P. Act, is mandatory in nature, and in absence of such

statutory notice, the suit is not maintainable.

3.4 Being aggrieved, the plaintiffs have preferred the

present appeal before this Court, inter alia, on the grounds

raised in the appeal memo.

4 I have heard learned advocate Ms.Archana Acharya

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for the appellants, learned advocate Mr. Vedant Gaikwad for

Ratangadh Gram Panchayat and learned AGP Mr.Bharat Vyas

for the respondent – State.

5. Learned advocate Ms.Acharya mainly submitted

that the learned Trial Court failed to appreciate the distinction

between a co-ownership and a partnership, and erroneously

applied Section 69 of the Partnership Act, 1932. She further

submitted that the mere use of a common trade name does

not establish that the persons have formed a partnership firm.

She also contended that even the sharing of income or profits,

by itself, does not constitute a partnership firm. She drew

attention of this Court to the plaint and submitted that it was

not a partnership firm which filed the suit; rather, three

brothers, carrying on business as co-owners, instituted the

suit for recovery of damages and for the relief of permanent

injunction. She further submitted that the learned Trial Court

committed a serious and manifest error in believing that a

partnership firm was the plaintiffs, whereas in fact it was the

three brothers, who had filed the suit seeking the reliefs

prayed for in the plaint. She submitted that even if co-owners

describe themselves as a firm, it does not ipso facto make

them a partnership firm. She contended that, in order to

constitute a partnership, the essential ingredients as defined

under Section 4 of the Partnership Act must be satisfied, and

in the absence of such ingredients, no conclusion can be

drawn that the entity is a partnership firm merely based on

the name under which the suit is filed.

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5.1 She further submitted that the plaint was duly

signed by all three brothers and not by one acting as an agent

of the others, which clearly demonstrates that the suit was

filed by individual acting as co-owners. She submitted that the

contract awarded by the Ratangadh Gram Panchayat for

cutting babool trees was likewise executed by all three

brothers. Thus, the finding of the learned Trial Court is that

the suit filed by an unregistered partnership firm is not

maintainable in view of Section 69(2) of the Partnership Act.

5.2 In support of the aforesaid submissions, she relied

upon the following decisions:

(i) Champaran Cane Concern Vs. State of Bihar &

Anr. reported in 1963 SCC Online SC 240, (ii)

Maliram Chowdhury Vs. Jagannath Modi

reported 1971 SCC Online Ori 25 ,(iii) Mirza Najm

Effindi Vs. Firm Kohinoor Footwear Co. reported

in 1945 SCC Online All 159; (iv) Mohammad

Laiquiddin & Anr. Vs. Kamala Devi Misra (Dead)

By LRS. & Ors. reported in (2010) 2 SCC 407. (v)

Nath Lal Vs. Sri Mal & Another reported in AIR

1940 All 230;

5.3 She further submitted that even if a transaction

took place in a particular name claiming to be a firm, a

solitary transaction does not constitute a partnership firm.

She submitted that the essential ingredients, as defined under

Section 4 of the Partnership Act, must be satisfied to establish

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the existence of a partnership firm—namely: (i) there must be

an agreement between the partners; (ii) there must be a

sharing of profits and losses of the business; and (iii) the

business must be carried on by all or any of them acting for

all. In the present case, none of these ingredients are

satisfied. Therefore, Section 69 of the Act, is not attracted,

and the learned Trial Court has committed a serious and

manifest error in dismissing the suit on the ground that the

plaintiffs is an unregistered partnership firm and, thus, the

suit is not maintainable.

5.4 The second limb of the submissions canvassed by

learned advocate Ms. Acharya is that the plaintiffs’ claim lies

against the State Government, which failed to grant the

access of 20 acres of land to the plaintiffs for cutting babool

trees. This 20 acres, parcel of land was in the possession of

the Forest Department, which is a branch of the State

Government. Therefore, she submitted that the suit is

maintainable even without issuing notice under Section 320 of

the G.P. Act, as no relief is sought against the Ratangadh

Gram Panchayat. Expanding her arguments, Ms. Acharya

referred to Section 88 of the G.P. Act read with Schedule-I,

and submit that the functions of the Panchayat are limited to

matters such as maintenance of property belonging to the

Panchayat and public purpose maintenance. The Panchayat

has no authority to enter into contract for the clearance of

babool trees or any other trees on Gauchar land. Such a

contract would fall within the domain of the State Government

and, in the present case, permission to cut trees, appears to

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have been granted by the Deputy Collector on behalf of the

State Government. In view of this, the finding of the learned

Trial Court that the suit is not maintainable without issuing a

notice under Section 320 of the G.P. Act, is contrary to settled

legal principles.

5.5 Lastly, learned advocate Ms. Acharya submitted

that it is a clear case where documentary evidence establishes

that the plaintiffs were deprived of access to 20 acres of land

for cutting babool trees. Consequently, the plaintiffs could not

derive the profits that would have accrued from cutting

babool trees on land bearing Survey No.269. She would

submit that, in fact of the case, it is presumed that the

plaintiffs have suffered damages, as the State Government,

despite agreeing to provide access to a total of 174 acres of

land, failed to grant full access, thereby breached its promise.

Therefore, in view of Section 73 of the Contract Act, the

plaintiffs are entitled to claim damages.

5.5 In view of the aforesaid submissions, learned

advocate Ms.Acharya prayed to allow the present First Appeal

and also prayed that the impugned judgment and decree

passed by the Court below be set aside and the reliefs as

prayed for be granted.

6. Per contra, learned advocate Mr.Gayakwad

referred to the title of the suit and submitted that the suit has

been filed by Jayantilal & Hiralal & Amrutlal Company

through three plaintiffs. He submitted that Order XXX Rules 1

and 2 provide that a suit has to be filed in the name of the

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firm, disclosing the names of its partners. He further

submitted that, by strictly following the said procedure, the

plaintiffs have filed the suit. However, the plaintiffs have

taken a contradictory stand by stating that the suit has been

filed by co-owners and not by the partnership firm. He

submitted that if the suits were filed by co-owners, then there

was no need to mention the plaintiffs firm in the cause title of

the plaint.

6.1 Learned advocate Mr. Gayakwad also referred to

the deposition of plaintiff No.2 at Ex. 66 and submitted that,

in the deposition, plaintiff admitted that Jayantilal Hiralal

Amrutlal is a registered partnership firm and plaintiff Nos.1 to

3 are its partners. It is further admitted that the public

auction took place on 16.06.1981, whereas the partnership

firm came into existence in 1984 by execution of a partnership

deed. It is also admitted that on the date when the public

auction took place, the registered partnership firm was not in

existence, although a partnership between the partners

existed whereby. It was decided that the work of cutting babul

trees would be undertaken jointly, and the partnership firm

would be constituted once the contract was awarded. He

further submitted that, upon perusal of the pleadings, the

plaintiffs have not made necessary averments regarding when

the partnership firm came into existence, how the contract

was obtained, what were terms and conditions agreed

between the three brothers to conduct the business, and

whether the business was carried out as a partnership firm.

He further submitted that Ratangadh Gram Panchayat, in its

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written statement at Ex.18, specifically raised these

contentions in unambiguous terms; however, the plaintiffs

failed to clarify these aspects either by leading oral or

documentary evidence but remained silent. He further

submitted that, upon perusal of Exs.232 and 175, it is

demonstrated that the partnership firm was registered

subsequent to the filing of the suit, i.e., on 5th January, 1984.

Prior to the date of filing of the suit, the partnership was

unregistered, which attracts the bar under Section 69(2) of

the Partnership Act. Therefore, he submit that the learned

Trial Court has rightly considered the issue and decided it in

favour of Ratangadh Gram Panchayat.

6.2 In support of his submissions, learned advocate Mr.

Gayakwad relied upon the decisions in the case of M/s.

Shreeram Finance Corporation Vs. Yasin Khan & Or. reported

in (1989) 3 SCC 476 and Purushottam & another Vs. Shivraj

Fine Arts Litho Works & Ors. reported in (2007) 15 SCC 58.

6.3 The next submission of learned advocate Mr.

Gayakwad is that Ratangadh Gram Panchayat is a statutory

body, and under the provisions of the G.P. Act, particularly

Section 320, no suit can be filed against the Gram Panchayat

without prior issuance of a statutory notice. He submitted

that, in the present case, admittedly no such statutory notice

was issued prior to filing of the suit. He submitted that, from

the pleadings of the plaintiffs, it is evident that the plaintiffs

has nowhere alleged mala fide action on the part of

Ratangadh Gram Panchayat. In view of this, the plaintiffs

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were mandatorily required to issue notice under Section 320

of the G.P. Act. The findings of the learned Trial Court in this

regard are fully justified and legally sound.

6.4 On the basis of the above submissions, learned

advocate Mr. Gayakwad prayed for dismissal of the present

First Appeal.

7. Learned AGP Mr.Bharat Vyas adopted the

submissions of learned advocate Mr.Gayakwad and submits

that the judgment and decree passed by the learned Trial

Court be confirmed by dismissing this Appeal.

8. Having heard learned advocates appearing for the

parties and considering their rival submissions, the following

questions arise for consideration, particularly in light of the

bar under Section 69(2) of the Partnership Act, as well as

provision of Section 320 of the G.P.Act.

(i) Whether it is proved that the suit has been filed

by Jayantilal Amrutlal Hiralal and Company?

(ii) Whether the suit of the plaintiffs is not

maintainable against Ratangadh Gram Panchyat on

the ground that notice under Section 320 of the

G.P.Act was not issued?

(iii) Whether the plaintiffs prove that they are

entitled to damage to the tune of Rs.5,27,000/- in

respect of a contract for which they paid

Rs.17,5000/- towards the total amount for cutting

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babool tree standing on land admeasuring 174

acres in survey No.269 of Ratangadh Gram

Panchyat village?

(iv) Whether the learned Trial Court has committed

any error in dismissing the suit of the plaintiffs?

9. From the rival pleadings, the learned Trial Court

framed the following issues at Ex.40:

(1) Whether Plaintiffs prove that Plaintiff is a registered

partnership firm?

(2) Whether Plaintiffs prove that bid of Rs.17,500/- to cut

babul trees standing on 174 acres of Sr.No.269 of village

Ratangadh was accepted by Deft. No.1?

(3) Whether Deft. No.2 proves that the Deft. No.1 was not

authorised to auction 20 acres of land out of 174 acres of Sr.

No. 269 of village Ratangadh ?

(4) Whether Plaintiffs prove that they were restrained from

cutting the trees by Deft. NO.2 from 20 acres of land of

Sr.No. 269? If yes, They are entitled to extend time for

cutting trees ?

(5) Whether Deft. No.1 proves that Plaintiffs were unable to

cut the Babul trees within stipulated period.?

(6) Whether Suit is bad for want of notice u/s 80 CPC ?

(7) Whether the suit is bad for want of notice u/sec. 320 G.P.

Act ?

(8) Whether the Suit is barred by limitation?

(9) Whether the suit is barred by principle of estopal ?

(10) Whether this Court has no jurisdiction ?

(11) What reliefs the Plaintiffs are entitled to ?

(12) What order and decree?

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10. Issue Nos.1, 6, 8 and 11 were answered in the

negative. Issue Nos.2, 7 and 9 were answered in affirmative.

The first part of Issue No.4 was answered in the affirmative,

whereas the second part was answered in negative. The

learned Trial Court held that it had jurisdiction to try the suit

and accordingly answered Issue No.10, ultimately dismissing

the suit.

11. The core dispute between the parties is whether

the partnership firm, as plaintiffs, have filed the suit are three

brothers as co-owners have filed suit? The title of the plaint

indicates that plaintiff Nos.1, 2, and 3 have filed the suit as

persons carrying on business under the name and style of

Jayantilal Hiralal & Amrutlal Company. This suggests that the

suit has been filed in terms of Order XXX of the Code of Civil

Procedure. However, the averments in the plaint do not

clearly specify whether the plaintiffs have filed the suit as

partners of a partnership firm or in the individual capacity in

the name and style of the business under the ownership. In

the absence of specific pleadings, describing the title in the

name of a firm without clarification would suggest that the

suit has been filed by a partnership firm as contemplated

under Order XXX of the CPC.

12. It is an admitted position that the plaintiffs did not

produce the registration certificate of the partnership firm

along with the plaint. The plaintiffs have also failed to plead

the date of registration of the partnership firm or disclose the

names of its partners. Plaintiff No.2 entered into the witness

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box at Ex.66 as P.W.1. In cross-examination, he admitted that,

at the time of filing the suit, the partnership firm was

unregistered. Simultaneously, he did not clarify whether the

suit had been filed by the firm or by three brothers in their

individual capacity as co-owners. Such silence assumes

significance as Ratangadh Gram Panchayat in its written

statement raised this issue with specific contention. He

further admitted that he was unaware whether the

partnership firm is registered. In the cross-examination by the

learned advocate for defendant No. 2, he admitted that the

public auction took place on 16th June, 1981, and the

partnership firm came into existence in 1984. Thus, at the

time of the public auction, the partnership firm was not in

existence. He further admitted that although the firm was not

in existence, there was an understanding of partnership

among the three brothers prior to the auction. It was also

admitted that such partnership was not registered at the time

of the auction and was registered subsequently. Apt to note

that the written statements filed by defendant Nos.1 and 2

raised a specific objection that the partnership firm was

unregistered.

13. In the backdrop of the aforesaid pleadings and

factual aspects as well as evidence, reference made to Section

69(2) of the Indian Partnership Act, which reads as under:-

“69(2) No suit to enforce a right arising from a contract shall

be instituted in any Court by or on behalf of a firm against any

third party unless the firm is registered and the persons suing

are or have been shown in the Register of Firms as partners

in the firm.”

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14. The plain reading of Section 69(2) of the Act

stipulates that the suit to enforce a right arising from a

contract shall not be instituted in any Court by or on behalf of

a firm against the third party unless the firm is registered and

the persons suing are or have been shown in the register of

firm as partners in the firm.

15. The Hon’ble Supreme Court, in the case of M/s

Shriram Finance Corporation (supra) , in para 6, has

explained the effect of Section 69(2) of the Partnership Act,

which is as under:-

“6.In the present case the suit filed by the appellants is clearly

hit by the provisions of sub-section (2) of section 69 of the said

Partnership Act, as on the date when the suit was filed, two of

the partners shown as partners as per the relevant entries in

the Register of Firms were not, in fact, partners, one new

partner had come in and two minors had been admitted to the

benefit of the partnership firm regard- ing which no notice was

given to the Registrar of Firms. Thus, the persons suing,

namely, the current partners as on the date of the suit were not

shown as partners in the Register of Firms. The result is that

the suit was not maintainable in view of the provisions of sub-

section (2) of section 69 of the said Partnership Act and the

view taken by the Trial Court and confirmed by the High Court

in this connection is correct.

16. Yet in judgment in the case of Purshottam (supra),

in para 8, the Hon’ble Apex Court has held as under:-

“8. The question as to whether the subsequent registration

of the firm would cure the initial defect in the filing of the

suit arose for consideration in D.D.A. Vs. Kochhar

Construction Work and Anr. (1998) 8 SCC 559. This Court

held that in view of the clear provision of the Act it was not

possible to subscribe to the view that subsequent

registration of the firm may cure the initial defect, because

the proceedings were ab initio defective as they could not

have been instituted since the firm in whose name the

proceedings were instituted was not a registered firm on the

date of the institution of the proceedings. This Court also

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noticed the difference of opinion amongst the High Courts

and concluded thus:- (SCC P.562 para 4)

“4.Counsel for the respondents, however, invited our

attention to two decisions which take a view that

subsequent registration of the firm can cure the initial

defect provided the registration is before the period of

limitation has run out. Our attention was drawn to

M.S.A. Subramania Mudaliar Vs. East Asiatic Co. Ltd.

and Atmuri Mahalakshmi Vs.Jagadeesh Traders.

However, the High Court of Patna in Laduram Sagarmal

Vs. Jamuna Prasad Chaudhuri and the High Court of

Madras in T. Savariraj Pillai Vs. R.S.S. Vastrad & Co.

take a contrary view and hold that the suit is

incompetent ab initio. We have considered these

decisions, but in the light of the plain language of

Section 69 of the Partnership Act read with Section 20 of

the Arbitration Act and in view of the decision of this

Court reported in Shreeram Finance Corpn. We are

clearly of the opinion that proceedings under Section 20

of the Arbitration Act were ab initio defective since the

firm was not registered and the subsequent registration

of the firm cannot cure that defect".

The same view was also reiterated in U.P. State Sugar

Corpn. Ltd. v. Jain Construction Co.

17. In view of the aforesaid aspect, according to this

Court, the plaintiffs have miserably failed to establish their

right to file the suit for enforcement of a contractual right. It

implies that the learned Trial Court has not committed any

error in deciding the issue against the plaintiffs. The

contention of the learned advocate Ms.Acharya that the

plaintiffs were carrying on business as co-owners appears to

be an afterthought. The pleadings and evidence on record

clearly indicate that the suit has been filed by a partnership

firm which was not registered on the date of institution of the

suit. Even though the firm was subsequently registered, such

registration does not cure the defect under Section 69(2) of

the Partnership Act. Accordingly, the first contention raised

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by the learned advocate Ms. Acharya, is rejected.

18. To address next question, it would be apposite to

refer Section 320 of the Gujarat Panchayat Act, which reads

as under:-

“320 (1) No action shall be brought against any panchayat,

conciliation panch or Nyaya Panchayat or any member, officer,

servant or agon of a pan-chayat, conciliation panch or Nyaya

Panchayat acting under its direction, in respect of any-thing in

good faith done under thin Act or any rule or by-law.

(2) No action shall be brought against any panchayat,

conciliation panch or Nyaya Panchayat or any member, officer,

servant or agent of such panchayat, conciliation panch, or

Nyaya Panchayat acting under its direction for anything done

or purporting to have been done by or under this Act until the

expiration of one month next after notice in writing has been

left for delivered at the office of the panchayat, conciliation

panch or Nyaya Panchayat and also at the residence of the

member, officer servant or agent thereof against whom the

action is in-tended to be brought. The notice shall, state the

cause of action, the nature of the relief sought; the amount of

compensation claimed and the name and place of abode of the

person who intends to bring the action.

(3) Every such action shall be commenced within six months

after the accrual of the cause of action, and not afterwards.

(4) If any panchayat, conciliation panch, Nyaya Panchayat or

person to whom the notice un-der sub-section (2) is given shall,

before an action is brought, tender sufficient amends to the

plaintiff, and pay into Court the amount so tendered. The

plaintiff shall not recover more than the amount so tendered;

the plaintiff shall also pay all costs incurred by the defendant

after such tender.

19. The provision begins with the word “no”, indicating

its mandatory nature. Therefore, no action can be instituted

against the Panchayat or its members or officers without

issuing a statutory notice of one month. Further, the limitation

period for filing such a suit is six months from the date of

accrual of the cause of action.

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20. The argument of the learned advocate Ms. Acharya

that the Panchayat is only a formal party and has no authority

under Section 88 of the G.P. Act to award contract to the

plaintiff runs contrary to the pleadings in the suit. It is the

plaintiff’s own case that the Panchayat conducted the public

auction, wherein the plaintiffs were the highest bidder and

was awarded the contract for cutting babool trees on land

admeasuring 174 acres. Since the Panchayat issued the order

in favour of the plaintiffs, the suit was essentially against the

Gram Panchayat as well as the State Government. The learned

Trial Court, with regard to notice under Section 80 of the

Code, granted exemption by passing an appropriate order.

Therefore, the plaintiffs were not required to issue notice

under Section 80 of the Code. The findings are not found to be

germane at this stage, particularly since such findings have

not been challenged.

21. As far as the notice under Section 320 of the G.P.

Act is concerned, the finding of the learned Court is correct.

The notice is mandatory. The suit has been filed against the

Gram Panchayat in the absence of any pleadings or

allegations of mala fide action on the part of the Panchayat, its

members, officers, or servants. Prior to filing suit, the

issuance of notice under Section 320 of the G.P. Act is

mandatory. A plain reading of the plaint does not indicate that

the plaintiffs have alleged any mala fide action on the part of

the Gram Panchayat or its officers or servants. In view of the

above, the finding of the learned Trial Court that, the suit filed

without issuing notice under Section 320 of the G.P. Act, is

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not maintainable, is a correct proposition of law and does not

call for any interference.

22. The argument that, plaintiffs are entitled to

damages of Rs. 5,27,500/- under a contract awarded for a

meager amount of Rs.17,500/- is surprising and laughable, the

contract does not stipulate that, in the event of a breach,

Gram Panchayat or the State Government would be liable to

pay any compensation. Therefore, Section 73 of the Contract

Act, ipso facto, does not entitle the plaintiffs to compensation

for alleged loss or damage caused by breach of contract. A

person claiming damages for breach of contract must first

establish that the contract was breached due to non-

performance of the promise by other party. The promiser

claiming damages must prove that the promisee failed to

perform their part, and vis-a-vis and thus, he actually

sustained damage.

23. Upon perusal of the record, this Court does not find

any evidence to show that the defendants breached the

contract or failed to fulfill their promises. The plaintiffs, who

claim damages for not being permitted to cut babool trees on

20 acres of land and seek compensation of Rs. 5,27,500/-, has

failed to establish how many babool trees, he had cut from the

remaining parcel of land. It is pertinent to note that the

plaintiffs were awarded a contract to cut babool trees on 174

acres of land. Even, if the contention of the plaintiffs is

accepted that they were not permitted to cut trees on 20

acres, they were required to prove that, within the stipulated

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period (i.e. before 31st July 1982), they had cut the babool

trees on the remaining 154 acres. The plaintiffs hopelessly

failed to prove any such contention and, therefore, plaintiff’s

suit does not attract Section 73 of the Contract Act. Another

aspect deserves consideration is that the said 20 acres of land

had already been allotted to the Forest Department by the

State Government under the “Gram Vanikaran Scheme” at the

time when the contract was awarded. Thus, the land was not

in the possession of the Gram Panchayat. Despite this, the

Ratangadh Gram Panchayat awarded the contract for cutting

babool trees on that land. The contract, therefore, suffers

from inherent illegality. This is evident from Exhibit 184, a

letter written by the Sarpanch of Ratangadh Gram Panchayat

to the Divisional Forest Officer (DFO) requesting handover of

possession of the 20 acres. Although, the letter is undated, it

clearly indicates that it was written subsequent to the award

of the contract. In nutshell, at the time of awarding the

contract, the said 20 acres were not in the possession of the

Gram Panchayat or the State Government. Furthermore, the

Forest Department is not a party to the suit. Therefore, the

grant of a contract in respect of land not in possession of the

Gram Panchayat, is bad in law. The plaintiffs cannot claim

right upon such illegal contract to claim for damages.

Noticeable that plaintiff had tendered undertaking to Forest

Department that he will not enter in 20 acres land preserved

by Forest Department under the “Gram Vanikaran Scheme.”

24. In view of the aforesaid reasons, the plaintiffs have

no case and appear to be attempting to claim an exorbitant

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C/FA/5383/1997 CAV JUDGMENT DATED: 07/04/2026

amount of damages under a contract that was awarded for a

meager amount of Rs.17,500/- while claiming an amount of

Rs.5,27,500/-. Consequently, for aforesaid reasons, the appeal

sans merits, inexorably merits dismissal and is, accordingly

dismissed. R&P, if any, be sent back to the concerned Court.

25. Civil Application, if any, does not survive and

stands disposed of accordingly. Interim relief, if any, stands

vacated.

(J. C. DOSHI,J)

MANOJ

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