Failure to Object to Notice Under Section 80 CPC Constitutes Waiver: Orissa High Court Dismisses Appeal

Orissa High Court dismissed a second appeal filed by the State of Orissa and its Executive Engineer challenging the maintainability of a civil suit on the grounds of non-service of notice under Section 80(1) of the Code of Civil Procedure, 1908 (CPC). The Court held that the appellants, having failed to object to the lack of notice in their written statement or during the trial, had waived their right to challenge the issue at the appellate stage.

The dispute arose from a construction contract between M/s. B. Engineers and Builders Private Limited and the State of Orissa. Under the contract, the plaintiff was engaged to construct a high-level bridge over the Vansadhara River in Rayagada district. The construction period was initially set for 36 months from January 25, 1985, but due to unforeseen circumstances, the timeline was extended twice, ultimately until June 30, 1992. Despite the extensions, the State canceled the contract on January 27, 1992, alleging delay and poor progress, and decided to adjust the plaintiff's security deposit of ₹8.85 lakh against purported losses.

The plaintiff filed a civil suit (T.S. No. 04 of 1992) seeking a declaration that the cancellation of the contract was illegal and that the defendants be restrained from encashing the bank guarantees. The defendants contested the suit but did not raise any objections regarding the absence of notice under Section 80(1) CPC in their written statement or during the trial.

The trial court ruled in favor of the plaintiff, holding that the cancellation was unilateral and arbitrary, particularly since the extended period for completing the contract had not yet expired. The trial court restrained the defendants from invoking the bank guarantees until the final settlement of accounts. On appeal, the first appellate court (T.A. No. 04 of 1993) upheld the trial court's findings, dismissing the defendants’ appeal.

The defendants filed a second appeal under Section 100 CPC, arguing that the suit was not maintainable due to non-service of notice under Section 80(1) CPC. They contended that the statutory requirement of prior notice is mandatory for filing suits against the government or public officers, and failure to comply renders the suit void ab initio.

The High Court examined the scope and purpose of Section 80(1) CPC, which mandates that a two-month notice must be served to the government or its officers before instituting a suit. The Court reiterated that while the provision is mandatory, it can be waived if the defendants do not object at the earliest opportunity. The Court emphasized that the primary purpose of the notice requirement is to give the government an opportunity to review the plaintiff's claim and avoid litigation if possible.

The Court observed that the defendants neither raised the issue of notice in their written statement nor framed it as an issue during the trial. The defendants also failed to press this objection before the first appellate court. Referring to settled legal precedents, including Raghunath Das v. Union of India (AIR 1969 SC 674) and Dhian Singh Sobha Singh v. Union of India (AIR 1958 SC 274), the Court held that failure to object to the absence of Section 80(1) notice constitutes a waiver, and the plaintiff cannot be non-suited on that ground.

The High Court underscored that waiver of statutory notice has been consistently upheld by courts, as seen in cases like State of Punjab v. M/s. Geeta Iron & Brass Works Ltd. (AIR 1978 SC 1608) and State of Andhra Pradesh v. M/s. Pioneer Builders, A.P. (2007 (1) CJD (SC) 40). It further noted that the issue could not be raised for the first time at the second appellate stage, particularly when no objections were raised during the trial or first appeal.

The Court also declined to interfere with the concurrent findings of the trial court and the first appellate court, which had both concluded that the cancellation of the contract was illegal and arbitrary. The High Court affirmed that the defendants had unilaterally rescinded the contract without proper justification and could not adjust the plaintiff’s security deposit.

The Court dismissed the appeal, holding that the defendants’ failure to raise objections regarding Section 80(1) notice at the appropriate stage precluded them from challenging the suit’s maintainability. It confirmed the judgments and decrees of the trial court and first appellate court, which had ruled in favor of the plaintiff.

The judgment reaffirms the principle that procedural objections, such as the absence of statutory notice under Section 80 CPC, must be raised at the earliest opportunity. Failure to do so constitutes a waiver, and courts are justified in entertaining suits in such cases.

Date of Judgment: December 3, 2024