Badri Prasad v. State of Madhya Pradesh by Jayanth Potharaju of Jindal Global Law School
1969 SCR (2) 380
This case was a special leave petition brought in front of the Supreme Court to deem whether a certain quantity of cut timber belonged to the State or the plaintiff. The trial court had favored the respondent. The High Court on appeal favored the State and allowed an appeal to the Supreme Court which upheld the decision.
A contract was entered between the plaintiff and a minor through their guardian for the procurement of teak trees of more than 12 inches girth. The terms inter alia specified that a sum of 17,006 rupees must be paid by the plaintiff so that such procurement could take place. The plaintiff paid the sum and started working under the terms of the contract on March 31st, 1951.
On January 26th, 1951, the Abolition of Proprietary Rights Act, 1950[i] (hereinafter referred to as ‘the Act’) was passed which allowed the State Government to procure the forest land. Under the powers of this Act, the Government disallowed the plaintiff from cutting timber.
On 1st February 1955, after negotiations, the plaintiff accepted a letter by the Government to sell the land for another 17,000 rupees albeit subject to certain conditions. The Government rejected the plaintiff’s response.
- Whether the State Government has the right over the forest land?
- Even if it does, will the State have the rights over the cut timber?
- Was a contract between the plaintiff and the Government formed on 1st February, 1955?
The Plaintiff made three arguments. Firstly, that the forest and trees did not vest in the State under the Act. Secondly, even if they vested the timber sold to the plaintiff did not vest in the State under the Act and thirdly, that a new contract was completed on 5th February 1955. Finally, the plaintiff contended that all the cases cited by the State did not hold any ground as this by nature was a contract for sale of goods as opposed to the cases cited.
The State cited a number of cases. Firstly, Ananda Behera v. The State of Orissa was cited to show it was only immovable property that was exempted in the Transfer of Property Act.[ii] Secondly, Mahadeo v The State of Bombay was cited to show that the extinction of the rights under the Act could not construe a fundamental rights violation. Further, they elaborated that such rights of the State existed under Sections 3 and 4 of the Act.[iii] Finally, State of Mahya Pradesh v Yakinuddin was cited to show that the rights would be given to the plaintiff only if his interests fell under the clauses of Section 5 of the Act.[iv] In this case, they argued that the interests did not fall under said clause.
The Court first disagreed that the plaintiff had become owner of the trees as ‘goods’. Although they were goods under the Sale of Goods Act, in order to not be proprietary; they must be felled as stipulated under Section 5 of the Act.[v] Also, the trees which were more than 12 inches girth had to be ‘ascertained’ in order to conform to S.19 of the Sale of Goods Act.[vi] Further, the contract stipulated that the timber must be passed only after the trees had been felled.
In the given case, the trees had been felled almost two months after the Act had been passed. Thus, firstly, the trees had not been ‘ascertained’ yet according to the Sale of Goods Act and secondly, as they were still standing on time of passing of the Act; the proprietary rights had been shifted to the State.
Also, the Court held that the letter could only be treated as an invitation to an offer rather than an actual offer. Even if treated as an offer, the Divisional Officer required the plaintiff to give up his right to his refund of the initial 17,000 and required the plaintiff to submit an additional 17,000. The plaintiff did not agree to these terms. For a contract to be concluded, there must be an absolute and unqualified acceptance.[vii] The Court held that the contract in the current case was conditional and qualified and thus did not fulfill the requirements of a contract.
1.) Goods must be ‘ascertained’ to fall under the ambit of the Sale of Goods Act.
2.) Standing trees, which are immovable property do not fall under the exceptions stated in Clause 5 of the Abolition of Proprietary Rights Act, 1951.
3.) For a contract to be concluded, there must be absolute and unqualified acceptance.
[i] Abolition of Proprietary Rights Act, 1950.
[ii] Ananda Behera v. The State of Orissa,  2 S.C.R. 919 1955.
[iii] Mahadeo v. The State of Bombay,  Supp. 2 S.C.R. 339 1959.
[iv] State of Madhya Pradesh v.Yakinuddin,  3 S.C.R. 13 1962.
[v] Sale of Goods Act, 1930, s. 2.
[vi] Sale of Goods Act, 1930, s, 19.
[vii] Indian Contract Act, 1872, ss. 2(a) and 2(b).
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