The appellant was the sole selling agent of motor spare parts for the manufacturers in the State of Bombay. The respondent-Corporation was constituted under the Bombay Provincial Municipal Corporations Act, 1949. Under s. 74 of Act and the Rules relating to contracts made under the Act, a contract relating to the purchase of goods exceeding Rupees D five hundred is to be made in the name of the Corporation by the Trans· port Manager, and, the contract has to be in writing and sealed in the presence of two members of the Transport Committee who should sign in token of the seal being affixed in their presence. Under s. 74(2), a· contract not made in accordance with the provisions of .the Act and the rules is not binding on the Corporation. The Transport Manager of the respondent-Corporation called upon the appellant to supply certain spare parts worth more than Rupees two lakhs. A formal contract incorporat 4 E ing the agreed terms w_as not and could not be executed and sealed as required by the Act. because, at the. time when the contract was entered into election of councillors to the Corporation had not been held and no Transport Committee was constituted and the powers of the C.Orpora~ tion and the Transport Committee were being exercised by the .Commis 4 sioner pursuant to the, transitory provisions of the Act.. The appellant supplied goods from time to time and the Corporation made payments F according to the invoices. One of the invoices was. for about Rs. 49,000-00. The invoice price consisted of an additional 12!% on the listed price by reason of the iricrease in the price made by the manufacturers. With respect to that invoice, the Transport Manager was satisfied that the rates quoted were 'proper rates' and he accepted the goods delivered on behalf of the respondent, and appropriated them. But the respondent failed to pay the amount and terminated the contract.
