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Nazaralli Sayad Imam Vs. Babamiya Dureyatimsha - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai
Decided On
Case NumberSecond Appeal No. 836 of 1914
Judge
Reported inAIR1915Bom244; (1915)17BOMLR701; 30Ind.Cas.913
AppellantNazaralli Sayad Imam
RespondentBabamiya Dureyatimsha
Excerpt:
.....1872), section 23-void contract-unlawful consideration-agreement to share profits and lass under a contract with forest department-agreement, though opposed to terms of license issued by forest department, not void.;the plaintiff sued for a declaration that he was entitled to recover half the share in the profit and loss made by the defendant in the grass contract entered into by him with the forest department, and to recover the sum falling to his share. the defendant contended that the agreement, if it could be proved, was void under section 23 of the indian contract act, inasmuch as it contravened a condition of his license, which prevent ed him from admitting any person as a partner without the permission in writing of the divisional forest officer. the lower court having held that..........therefore, he directed that a preliminary decree should be drawn up on that issue.3. the learned district judge reversed the preliminary decree and remanded the case to the lower court. the appellant has appealed to this court on the ground that the lower court erred in holding that the agreement of partnership was unlawful. but notwithstanding the pendency of the appeal it appears that the suit has been tried in the first court on the basis of the judgment of the district court being correct. that, however, need not prevent us from disposing of this appeal. we are of opinion that the judgment of the district court is not correct. the section of the indian contract act which is relied upon is section 23 which says:-'the consideration or object of an agreement is lawful, unless it is.....
Judgment:

Basil Scott, C.J.

1. The plaintiff sues the defendant to have it declared that he is entitled to recover half the share in the profit and loss made by the defendant in the grass contract for nine forest coups, and to recover the sum falling to his share as damages and costs. The defendant denied the alleged partnership in the terms set up in the plaint, and contended that the suit was bad as being based on an agreement, if there was such an agreement, which was void under Section 23 of the Indian Contract Act.

2. The learned Subordinate Judge found that the agreement was not unlawful under Section 23 of the Indian Contract Act. Therefore, he directed that a preliminary decree should be drawn up on that issue.

3. The learned District Judge reversed the preliminary decree and remanded the case to the lower Court. The appellant has appealed to this Court on the ground that the lower Court erred in holding that the agreement of partnership was unlawful. But notwithstanding the pendency of the appeal it appears that the suit has been tried in the first Court on the basis of the judgment of the District Court being correct. That, however, need not prevent us from disposing of this appeal. We are of opinion that the judgment of the District Court is not correct. The section of the Indian Contract Act which is relied upon is Section 23 which says:-'The consideration or object of an agreement is lawful, unless it is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any law;' and it is contended that because the licence given by the Forest Officer prohibits the assignment of a share or interest in the license, therefore, this agreement to pay half the profits to the plaintiff falls within the words of Section 23 above referred to. We have examined the Forest Act, and we have heard all that can be said by the pleader for the respondent in support of the judgment of the Court below. We are unable to find any provision of statute law which makes it obligatory upon the parties to observe the conditions of the licence. Of course the licence can be revoked by the Forest Officer if the licensee disregards the terms of it. It does not follow from that that an agreement to share profits, which would contravene the terms of the licence as between the Forest Officer and the licensee, is forbidden by law, or would defeat the provisions of any law. The learned District Judge has relied upon the case of Raghunath Lalman v. Nathu Hirji Bhate I.L.R. (1894) 19. Bom. 626, which, however, is distinguishable. That was a case under the Opium Act, under which the sale of opium was only permitted subject to such conditions as the Commissioner might, from time to time, prescribe. Therefore, the sale of opium by partners who could not enter into partnership without contravening the conditions prescribed would violate the provisions of the Opium Act. We set aside the decree of the District Judge upon the preliminary issue, and direct the Judge of the lower Court to dispose of the case on the merits. The respondent must pay the costs in this Court and the lower appellate Court upon the preliminary issue.


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