Skip to content


ismailji Yusufali Vs. Raghunath Lachiram Marwadi - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai
Decided On
Judge
Reported inIIIInd.Cas.779
Appellantismailji Yusufali
RespondentRaghunath Lachiram Marwadi
Excerpt:
contract act (ix of 1872), section 25 - contract--object forbidden by law--suit to recover money advanced on illegal contract--right to recover money--bombay salt act (ii of 1893), sections 11, 47. - - this was the defence to the action raised in both the courts below and it has failed there, 2. the ground on which both those courts have proceeded in overruling the plea of illegality is that the contract to sub-let is not absolutely prohibited by the license granted by the collector to the appellant. it was not made good in the lower court and we cannot go into it here......respondent obtained a sub-lease from the appellant on the same terms as those contained in the sub-lease obtained from yusufalli. for this sub-lease the appellant had obtained no permission from the collector as required by the license. the respondent deposited a sum of rs. 1,000 with the appellant to secure the performance by him of the conditions of the new sub-lease; the sub-lease was acted upon; its term expired; and the respondent paid all that was due under it to the appellant. the suit out of which the second appeal arises has been brought by the respondent to recover the deposit of rs. 1,000, because the appellant denied the respondent's right to that amount on the ground that the amount in question formed a consideration for an agreement, which, having been forbidden by law, was.....
Judgment:

Chandavarkar, A.C.J.

1. The facts in this second appeal are shortly these: One Yusufalli, father of the appellant, obtained from Government a lease of certain salt-pans under a certain license, one condition of which was that the lessee shall not sub-let the salt-pans without the written permission of the Collector. Without any such permission, however, Yusufalli sub-let to the respondent, who, as security for the performance of the conditions binding on him under the sub-lease, deposited a sum of Rs. 1,000 with Yusufalli. The respondent accordingly entered on possession of the salt-pans under his sub-lease. Sometime after that, Tusufalli having died, the appellant his son, obtained a fresh lease with a fresh license from Government and the respondent obtained a sub-lease from the appellant on the same terms as those contained in the sub-lease obtained from Yusufalli. For this sub-lease the appellant had obtained no permission from the Collector as required by the license. The respondent deposited a sum of Rs. 1,000 with the appellant to secure the performance by him of the conditions of the new sub-lease; the sub-lease was acted upon; its term expired; and the respondent paid all that was due under it to the appellant. The suit out of which the second appeal arises has been brought by the respondent to recover the deposit of Rs. 1,000, because the appellant denied the respondent's right to that amount on the ground that the amount in question formed a consideration for an agreement, which, having been forbidden by law, was illegal. This was the defence to the action raised in both the Courts below and it has failed there,

2. The ground on which both those Courts have proceeded in overruling the plea of illegality is that the contract to sub-let is not absolutely prohibited by the license granted by the Collector to the appellant. But that view of. the dealing between the parties ignores the real nature and object of the deposit to recover which the present suit was brought.

3. Under Section 11 of the Salt Act (Bombay Act II of 1890) the manufacture of salt without a license is prohibited subject to a proviso which is not material to our purpose here. Section 47 of the Act makes such manufacture an offence and renders any person committing it liable to punishment.

4. The real object and necessary effect of the agreement between the appellant and the respondent was to enable the latter to manufacture salt without a license in the guise of a sub-lease, although that was forbidden by law and by the terms of the license.

5. These facts support the application to this case of the principle of law enunciated by this Court in Hormasji Motabhai v. Pestonji Dhanjibhai 12 B. 422 and Raghunath Lalman v. Nathu Hirji Bhate 19 B. 626.

6. But a point is raised for the first time in second appeal by the learned pleader for the respondent. He states that his client manufactured salt not only under a sub-lease but also as manager under a power-of-attorney from the appellant. This case was not made in the Court below; and there is no evidence in support of it. Even if there had been, it is difficult to see how the power-of-attorney could have helped the respondent's case as ex concessions it existed side by side with the sub-lease. The illegal object of the transaction being clear upon the facts, the power-of-attorney could only have proved that by means of it the parties intended to disguise the real object of the agreement and defraud the Government.

7. The decree must be reversed and the claim rejected. Each party to bear his own costs throughout.

Heaton, J.

8. I agree that the decree must be reversed and the claim rejected.

9. It was assumed by the lower Court that the agreement was an agreement to sub-let certain salt-pans, which was prohibited by the license which Yasufalli obtained, and we must take it that that is so. In the lower Court it was contended otherwise, but now it has been sought to establish that the plaintiff acted on behalf of defendant No. 1, and not on his own account. That, however, is a question of fact. It was not made good in the lower Court and we cannot go into it here. The question, therefore, is whether the object of the agreement is forbidden by law within the meaning of Section 25 of the Contract Act. It seems to me that it is, for the object was to enable the plaintiff to manufacture salt without a license, and the law says that no salt shall be manufactured otherwise than by the authority of the license granted by the Collector.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //