Shah, J. - (1.) Messrs. R. B. Motilal Chamaria commenced an action in the court of the Subordinate Judge, Purnea for a decree against the State of Bihar for Rs. 2,34,213-2-9. They claimed that they had entered into contracts with the Government of Bihar to supply 1,50,000 maunds of paddy--1,00.000 maunds of local paddy at the rate of Rs. 6/12/- per maund, and 50,000, maunds of Nepal paddy at the rate of Rs 7/2/- per maund, and that they earned out the contract and submitted their bill on January 17, 1947 for the price of the paddy supplied but on final adjustment of account in respect of the paddy and other transactions relating to cloth and other claims made by them the State withheld Rs. 2,34,2132-9, claimed in the action. The amount claimed was under nine different heads as set out in the Schedule attached to the plaint:Rs. as. p. (A) Claim for deductions made in respect of shortages as in para 2 of the plaint 39,503-11-9 (B) Claim for deduction made for godown rents as in para 3 of the plaint. 19,272-06-6 (C) Price of 5602 mds. 11 srs. of paddy at the rate of Rs. 6/12/- per maund due as in para 4 of the plaint. 39,215-14-0 (D) Claim in respect of cloth supplied under barter scheme as in para 5 of the plaint. 29,774-00-0 (E) Loss in respect of cloth quota against paddy supplied to Katihar Rice & Oil Mills under barter scheme as in para 6 of the plaint. 40,256-00-0 (F) Loss suffered in respect of cloth quota not supplied against paddy supplied to the Government under barter scheme as in para 7 of the plaint. 40,617-00-0 (G) Claim for deduction made in respect of hand-pound rice supplied to the" Govern- ment as per ( ) in para 8 of the plaint. 5,118 06-0 (H) Excess difference wrongly charges as in para 9 of the plaint. 19,645-13-6 (I) Transport shortage as in para 10 of the plaint. 810-00-0 Total : 2,34,213-02-0
(2.) The State of Bihar denied liability and contended that the action was barred by the law of limitation, that there being no contract executed in the manner prescribed by Section 175(3) of the Government of India Act, 1935, the action was not maintainable, and that in any event the amounts claimed were properly withheld.
(3.) In the view of the Trial Court the plaintiff had acted as purchasing agents for the State, and were entitled to recover Rs. 1,379/- out of item (A), the entire claim in respect of items (B) & (C) and Rs 774 0-0 out of item (D), and nothing in respect of items (E) to (I). Against the decree passed by the Trial Court the State as well as the plaintiffs appealed. The High Court held that the plaintiffs were vendors who had supplied goods to the State of Bihar. The High Court further held that the plaintiffs suit was governed by Article 120 of the Limitation Act and the cause of action arose on September 22, 1951 when the account was finally made up by the Government of Bihar and they declined to pay the amount "of Rs. 2 34,213/2/9 to the plaintiffs. The High Court confirmed the decree of the Trial Court in respect of items (A), (B) and (C) and allowed Rs. 29,774/- for item (D). The State has appealed to this Court, with certificate granted by the High Court.;