P L D 1962 (W (PLP)

MASUD AHMED, J.‑This is an appeal against an order dated the 17th April 1957 passed by a Single Judge of this Court, who set aside an award In favour of the Federation of Pakistan which was made on the reference without the intervention of the Court. The facts, briefly, are that the respondents, namely, the Amin Agencies, made an offer to the Director of Purchase (Defence) on the 25th October 1948, for supplying 150 tons of ghee, at the rate of Rs. 180 per maund. This offer was accepted by the Director of Purchase (Defence) and the acceptance was communicated by means of a letter dated the 5th November 1948, a copy of which is at pages 7‑13 of the paper book. While accepting the offer, certain conditions were imposed by the officer concerned, but it is not clear from the record, whether the respondents agreed to abide by those conditions or not. A dispute having arisen between the parties and the goods in question not having been supplied, Mr. S. M. Yousuf, Joint Secretary of the Ministry of Commerce was appointed as an arbitrator. The arbitrator, after hearing both the parties, came to the conclusion that the respondents had committed breach of the terms of the contract, and that the appellant, namely, the Federation of Pakistan, had purchased goods at the risk of the respondents, at the rate of Rs. 181‑15‑0 per maund, but as the "Sind rate", at the relevant time, was Rs. 180 per maund the difference in the cost of purchase could not be recovered from the respondents. The arbitrator also came to the conclusion that as the respondents were bound to make arrangements for the purchase, packing, delivery etc. and as those arrangements were made by the appellant, through an agent, at a cost of Rs. 13 per maund, the respondents were liable to compensate the appellant to this extent. As a result of these findings, an award for a sum of Rs. 46,079 was passed in the appellant's favour. An application was moved, in this Court, by the arbitrator, under section 14 of the Arbitration Act, for the filing of the award. The respondents challenged the validity of that award on a number of grounds and filed an application under sections 16, 30 and 33 of the Act, to which they prayed that the award be set aside. One of the objections raised by the respondents was that as there was no completed agreement, as required by subsection (3) of section 175 of the Government of India Act, 1935, the agreement between the parties, if any, could not be enforced and, hence, no award could be given against them. The learned Single Judge, without deciding any of the other objections raised by the respondents, came to the conclusion that the provisions of subsection (3) of section 175 of the Government of India Act, were of a mandatory nature and as those provisions had not been complied with, there was no valid agreement between the parties and, hence, the award could not be enforced. As a result of these findings the award was set aside.

2. Subsection (3) of section 175 of the Government of India Act was in the following words "All contracts made in the exercise of the executive authority of the Federation or of a Province shall be expressed to be made by the Governor‑General, or by the Governor of the Province, as the case may be, and all such contracts and all assurances of property made fn the exercise of that authority shall be executed on behalf of the Governor‑General or Governor by such persons and in such manner as they may direct or authorise." This provision of law laid down that: (1) all such contracts shall be made by the Governor -General or the Governor, and (2) such contracts shall be executed by a person who is duly authorised to do so.

3. So far as the second mentioned point is concerned, it would not be necessary to say much. It is obvious that only such a contract is enforceable which has been executed by a person who has been duly authorised by the Governor‑General, or the Governor, as the case may be. In the present case, the authority of the Director of Purchase (Defence), who issued the letter of acceptance, is not disputed and, therefore, it is obvious that if the contract was in the form required by law it could be enforced against the respondents. Admittedly, no formal agreement, in writing, was executed by the Director of Purchase in the name of the Governor‑General and the question that requires decision is whether, in the absence of a formal agreement in the prescribed form, the Federation of Pakistan could enforce against the respondents the liability which they had Incurred after their offer was accepted.

4. The contention of the learned Attorney‑General, who appeared on behalf of the appellant, was that the provisions of subsection (3) of section 175 of the Government of India Act, 1935, so far as they relate to the form of such agreements, are not mandatory in nature and as there was a completed contract between the parties it could be enforced even though a formal document, in the name of the Governor‑General, was not executed. To support this contention the learned Attorney‑General relied on the following passage at page 376 of the Interpretation of Statutes, by Maxwell (10th edition) "A strong line of distinction may be drawn between cases where the prescriptions of the Act affect the performance of a duty and where they relate to a privilege or power. Where powers, rights or immunities are granted with a direction that certain regulations formalities or conditions shall be complied with, it seems neither unjust nor inconvenient to exact a rigorous observance of them as essential to the acquisition of the right or authority conferred, and it is therefore probable that such was the intention of the Legislature. But when a public duty is imposed and the statute requires that it shall be performed in a certain manner, or within a certain time, or under other specified conditions, such prescriptions may well be regarded as intended to be directory only in cases when injustice or Inconvenience to others who have no control over those exercising the duty would result if such requirements were essential and Imperative." The contention of the learned Attorney‑General was that as In executing a formal document, as required by subsection (3) of section 175 of the Government of India Act, 1935, the person performing the act was not exercising any power, but was doing a duty, the requirement of law must be construed to be directory and not mandatory in nature and, therefore, a rigorous compliance of this provision of law was not necessary. He also pointed out that the above‑mentioned statement of law was approved by their Lordships of the Supreme Court, in Zain Noorani v. Secretary of the National Assembly of Pakistan (P L D 1957 S C (Pak.) 46), as would appear from the following observations of their Lordships, made at page 62 of this reported judgment:‑ "Even if it is considered that Article 141 does not apply the fact that the election was held beyond the time fixed in that Article does not invalidate it. As has been pointed out by Wahiduddin, J. in the judgment under appeal the Article is directory and the following passage quoted by him from Maxwell on the Interpretation of Statutes is a complete answer to the argument of Mr. Mahmud All on this point."

5. The point requiring decision by their Lordships was not identical with that requiring decision in the present case and was about the interpretation of Article 141 of the late Constitution. Under that provision of law a bye‑election, for filling a casual vacancy, in the Assembly, was to be held not later than 3 months from the date of the occurrence of the vacancy. The election, in that particular case, was held after the expiry of the period of 3 months and as that provision of law was considered to be directory In nature the election was considered to be a valid one. Their Lordships of the Supreme Court accepted the principle that if a statute relates to the performance of a public duty and not to the exercise of any power the neglect of that duty is not penal and does not affect the validity of the act done, even though that act was not performed in the manner and within the time specified.

6. The learned Attorney General also referred to Sarfraz Khan and another v. Crown (P L D 1950 Lah.384), a case decided by a Full Bench of the Lahore High Court. The facts of this case were that a Bill had been passed by the Provincial Assembly and it was reserved by the Governor for consideration of the Governor -General as required by section 75 of the Government of India Act, 1935. Under section 76 of the Act, as it stood at that time, the Governor‑General was empowered to give his assent in "His Majesty's name" but when giving the assent to the Bill the Governor‑General did not do so, in the name of "His Majesty". It was held that the assent was valid and the Act was enforceable.

7. A somewhat similar question came up for decision before a Bench of this Court, in Khalid Waheed and another v. The Crown (P L D 1956 Lah. 541). The relevant provision of law (section 17 of the Government of India Act, 1935), which was similar to section 59 (2), laid down that orders and other instruments made and executed in the name of the Governor‑General shall be authenticated in such manner as may be specified in the rules to e made by the Governor‑General, and the validity of an order or instrument, which Is so authenticated, shall not be called In question, on the ground that it is not an order or instrument made or executed by the Governor‑General. In this case, no such instrument was executed and what happened was that an officer of the Central Government of the rank of a Deputy Secretary passed an order granting sanction to the prosecution of two persons, under section 5 (5) of the Pakistan (Criminal Law Amendment) Act, 1948. It was contended that the order of prosecution was not valid, inasmuch as it was not expressed to be issued in the name of Governor‑General, as was required by the relevant provision of law. The Court repelled this contention and held that the provision in question was directory rather than mandatory and, therefore, non‑conformity with it did not invalidate the order if, in fact, it proceeded from the appropriate authority after a consideration of the relevant facts. The Court also observed that section 17 (1) of the Act did not laid down that if the prescribed form was not adhered to the order would be deprived of all efficacy and that, in the absence of such indication, it would be too much to make a fetish out of this provision and to give it a consideration which might entail a considerable amount of inconvenience not only to the Government but also to the public at large.

8. It may here be pointed out, that the language of section 175 (3) of the Government of India Act, 1935, was not similar to the language of section 30 (2) of the Government of India Act, 1915 and section 29 (5) of the Government of India Act, 1919. These two provisions were worded as follows:‑ "Section 30 (2)‑Every assurance and contract made for the purpose of this section shall be executed by such person 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. Section 29 (S)‑Provided that any contract for or relating to the manufacture, sale, purchase or supply of goods, or for or relating to affreighment or the carriage of goods, or to insurance, may, subject to such rules and restrictions, as the Secretary of State‑in‑Council prescribes, be made and signed on behalf of the Secretary of State‑in‑Council by any person upon the permanent establishment of the Secretary of State‑in- Council who Is duly empowered by the Secretary of State‑in -Council in this behalf. Contracts so made and signed shall be as valid and effectual as if made as prescribed by the foregoing provisions of this section." The words italicised by us are very significant and indicate clearly that if the contracts were not in the prescribed form they could not be enforced against the Secretary of State. The language of section 175 (3) of the Government of India Act of 1935, is different and no such disability is imposed. If the intention of the Parliament had been that the directions in this provision of law should be strictly complied with and that their non‑compliance would have the effect of rendering the document invalid, or void, the Parliament could have expressed that intention by using language similar to that employed in the previous enactments. The fact that this was not done would indicate that the directions were not intended to be of a mandatory nature.

9. In Azim Khan v. The State of Pakistan and another (P L D 1957 Kar. 892), a Division Bench of this Court was called upon to Interpret the language of Article 135 of the late Constitution, which was similar to section 175 (3) of the Government of India Act, 1935. The Court held that the provisions of Article 135 were merely directory and not mandatory and that a contract which is otherwise completed would not be rendered void simply because it did not comply with the provisions of this Article.

10. Lastly, In the Province of West Pakistan v. Messrs Mistri and Patel Company and another (P L D 1959 Kar. 782), a similar question arose and one of us, who decided that case, held that: "There are two essential ingredients of the provision of law contained in section 175 (3), Government of India Act, 1935: Firstly that 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 : Secondly, 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 on such manner as he may direct or authorise. So far as the first ingredient of section 175 (3) is concerned, it is only of a directory nature."

11. The learned counsel for the respondents, while conceding that the proposition of law at page 376 of Maxwell on the Interpretation of Statutes (10th Edition), which has been reproduced above, was correct and while also conceding that a person executing an agreement contemplated by section 175 (3) of the Government of India Act, 1935 is performing a duty and not Exercising power, contended that as the respondents could have compelled that person to execute the document in the proper form the directions contained in this provision of law must be construed to be mandatory in nature. We are unable to accept this contention, for the simple reason that a member of the public; who is one of the contracting parties, in such a case, can have no control over the person who executes an instrument and hence cannot compel him to execute the document in a particular form. This provision of law cannot, therefore, be construed to be mandatory in nature and its non-compliance would not have the effect of rendering the document void.

12. The learned counsel for the respondents referred to a case of the Bombay High Court, reported as Secretary of State v. Bhagwandas Goverdhandas (A I R 1938 Bom. 168), to support his contention that the agreement, if any, arrived between the parties was void, because of the violation of section 175 (3) of the Government of India Act, 1935. This reported case was under the Government of India Act, 1915 and the relevant provision of law was section 30 (2) of the Act, which has been re‑produced above. That provision of law, as stated above, laid down clearly that only an instrument executed in the form prescribed could be enforced by or against the Secretary of State‑in‑Council. The Court held that the Collector who purported to have entered into an agreement on behalf of the Secretary of State was not com petent to do so and that the correspondence on the subject did not amount to a contract on behalf and in the name of the Secretary of State and, hence, could not be enforced by him. As the language of section 175 (3) of the Government of India Act, 1935, is different from that of section 30 (2) of the Government of India Act, 1915, this authority is of no help to the respondents.

13. The learned counsel also referred to a large number of authorities of the Indian High Courts, which are based on the following observations made by the Supreme Court of India, in the case of Chateurbhuj Vithaldas Jasani v. Moreshwar Parashram and others (A I R 1954 S C 236.). "The provisions of Article 299 (1) [which are similar to those of section 175 (3)] were not inserted for the sake of mere form. They are there to safeguard Government against unauthorised contracts. If in fact a contract is unauthorised or in excess of authority it is right that Government should be safeguarded. On the other hand, an officer entering into a contract on behalf of Government can always safeguard himself by having recourse to the proper form. In between is a large class of contracts, probably, by far the greatest in numbers, which, though authorised, are for one reason or other not in proper form. It is only right that an innocent contracting party should not suffer because of this and if there is no other defect or objection Government will always accept the responsi bility . . . . . It would be disastrous to hold that the hundreds of Government Officers who have daily to enter into variety of contracts, often of a petty nature, and sometimes in an emergency, cannot contract orally or through correspondence and that every petty contract must be effected by a ponderous legal document couched in a particular form. It may be that Government will not be bound by the contract in that case, but that is a very different thing from saying that the contracts as such are void and of no effect." The Court came to the conclusion that such contracts, though not void, could not be enforced against the Union or the State, because they were not in proper form. With all due respect to their Lordships, we are unable to agree with the views expressed by them, because in some that similar circumstances, in a numbers of cases, it has been held by this Court that the provisions of section 175 (3), or similar provisions which require that a certain instrument, or document, should be in a particular form, or in the name of a particular person, are not of a mandatory nature and their non‑compliance does not render the document, or instrument void.

14. The learned counsel also referred to a case of the Dacca High Court, reported as Nalini Kanta Roy v. The Province of East Pakistan and another (P L D 1961 Dacca 536), in which it was held that: "When a statute provides a particular method by which a contract should be made, there must be compliance with the provisions of the statute. Section 175 of the Government of India Act, 1935 and Article 135 of the Constitution of Pakistan (1956) provide a particular method by which a contract should be made with the Government. Any contract with the Government, not made in accordance with the statutory requirements will not be enforceable." A reference to the body of the judgment would show that the finding of the Court was that the Additional District Magistrate who purported to have entered into an agreement with one of the parties had no authority to enter into any such agreement on behalf of the Government and it was, primarily, for this reason that the Court came to the conclusion that the agreement was not enforceable against the Government. No doubt, the Court also observed that as there was no formal agreement between the plaintiff and the Government the latter was not bound by it, but that observation was unnecessary, in view of the finding that the officer who entered into the agreement was not competent to do so. This case, therefore, is not an authority for the proposition that an agreement or instrument which is not in the form prescribed by section 175 (3), Government of India Act, 1935 is void

15. Lastly, the learned counsel referred to the case of Laclaire Pakistan Corporation v. The Islamic Republic of Pakistan (P L D 1957 Kar. 285), a decision of the same learned Single Judge whose judgment is now under appeal. It was held in this case that the provisions of section 175 are mandatory and that a contract entered into in contravention of these provisions is not binding on the Governor‑General. A reference to page 290 of this judgment would show that the learned counsel who appeared for the appellant conceded that the word "shall" in clause (3) of section 175 of the Act rendered the compliance of this provision mandatory. After referring to a number of authorities, the learned Judge came to the conclusion that from the perusal of the authorities, on the subject, it appeared that the only difference of opinion was on the question whether any formal document was necessary for entering into a contract, on behalf of the Federation, but the principle laid down clearly showed that the contract must ex facie show that the provision of section 175 of the Government of India Act had been complied with. With all due respect to the learned Judge, we are of the opinion that in none of the cases decided by our High Courts, or the Supreme Court, before the decision of this case, it had been held, in so many words, that the provisions of section 175 (3) of the Act are mandatory in nature. On the other hand, our Courts throughout have been of the view that this and similar provisions of law which cast a duty on an officer to do an act were not mandatory in nature and that non‑compliance with them did not render the document, or instrument, void. No doubt, the Courts in India, following the view of their Supreme Court, have held that although such instruments and documents are not void, they are invalid and cannot be enforced against the State, but as our Courts have taken a different view we are not bound to follow the Indian authorities on the subject.

16. At the close of arguments, the learned Attorney General stated that in two cases decided by a Bench of this Court at Quetta it had been held that the provisions of section 175 (3) of the Government of India Act, 1935 were not of a mandatory nature and as those judgments had not yet been reported, he promised to send copies of the same for our perusal. Those copies have now been supplied and we find, from their perusal, that in one of the cases decided by a Division Bench Regular First Appeal No. 11 of 1957 on the 26th July 1957, it was held that the provision in section 175 (3) of the Government of India Act, 1935, concerning the contract being expressed to be made by the Governor‑General, places a duty on the officer concerned to adhere to such a form of expression and that it may well be argued that failure to comply with such a provision should not be held to invalidate the contract, as, on such a view, innocent contractors belonging to the public, might suffer hardship and inconvenience. The Court observed further that this view may receive support from the fact that no express provision is made in the Government of India Act, 1935, specifying that invalidation would be the consequence of failure to conform to the letter of section 175 (3). The views expressed in this case were followed by another Division Bench of this Court, in Syed Abdus Samad v. The Federation of Pakistan (First Appeal No. 22 of 1954) decided on the 8th September 1958, and it was held that the manner in which the contract has to be executed within the meaning of sub section (3) of section 175 of the Government of India Act, 1935, was only directory and not mandatory.

17. Following the views expressed in the last mentioned two oases and the other authorities referred to above, we hold that the contract entered into between the parties was not E invalid, or void, and hence the same could be enforced against the respondents. We, therefore, accept this appeal with costs, set aside the judgment and decree of the learned Single Judge, and remand the case for re‑decision on merits. R. B. A. Appeal accepted Case remanded.