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Rayudu Pallamsetti and anr. Vs. Dommeti Sriramulu - Court Judgment

LegalCrystal Citation
SubjectFamily;Contract
CourtAndhra Pradesh High Court
Decided On
Case NumberSecond Appeal No. 514 of 1963
Judge
Reported inAIR1968AP375
ActsIndian Contract Act, 1872 - Sections 23 and 65; Hindu Marriage Act, 1955 - Sections 5 and 5(3); Indian Limitation Act
AppellantRayudu Pallamsetti and anr.
RespondentDommeti Sriramulu
Appellant AdvocateK. Chalapathi Rao, Adv.
Respondent AdvocateN. Bapiraju, Adv.
Disposition Appeal dismissed
Excerpt:
.....judgment of buckley l. , stated :it is certainly the law that the court will refuse to enforce an illegal contract of obligations arising out of an illegal contract and i agree that the doctrine is not confined to the case of contract a plaintiff who cannot establish ins cause of action without relying upon an illegal transaction must fail; and, further, the purpose of the fraud having not only not been effected, but absolutely defeated, there is nothing to prevent the plaintiff from repudiating the entire transaction, revoking all authority of his confederate to carry out the fraudulent scheme, and recovering possession of his property. it is now well settled that a party to an illegal contract cannot invoke the aid of a court to have such a contract carried into effect as law will not..........appellate court tailed to see that the presents and moneys advanced were in furtherance of an illegal contract entered into by the parties in violation of the statutory provisions and any payments made pursuant to a contract prohibited by law or opposed to public policy, is tainted with illegality and hence not recoverable. a grievance is also made by him that while the trial court fixed the amount due at rs. 1,250 the lower appellate court enhanced the amount and fixed it at rs. 2,955 without any basis whatsoever. 7. therefore, the main question that arises for con liberation, is, despite the fact that the contract between the parties to celebrate the marriage of two minors, which is indisputedly opposed to public policy and hit by section 23 of the indian contract act and section.....
Judgment:

1. The suit out of which this second appeal arises was laid by the respondent (plaintiff) for recovery of Rs. 3,000 asbeing the price of gold ornaments given to the defendants in connection with the con-tract of marriage between the minor son of the plaintiff and the minor daughter of defendants 1 and 2.

2. In about the last week of May 1957, the 2nd defendant, the wife of the 1st defendant, as her husband (1st defendant) was away in Rangoon came to the house of the plaintiff to negotiate the marriage of her daughter with the plaintiff's son. The parties arrived at an agreement and decided that the marriage of the plaintiff's son should take place with the daughter of the defendant's (appellant's) and exchanged courtesies. Pursuant to the understanding arrived at, the plaintiff presented a gold chain costing Rs. 2,100, silk saree and other clothes and also a sum of Rs. 200 to meet some other incidental expenses. The total value of the presents and other items given to the defendant came to Rs 2,955. The 1st defendant returned from Rangoon on 20th August 1957 and even before that he had ratified the action of his wife and the plaintiff in settling the marriage of his daughter Subsequently, the marriage could not come off for a variety of reasons, and the plaintiff, therefore, laid action for recovery of the gold chain and other items presented to the daughter of the defendants, or the value thereof.

3. The defendants resisted the suit on the ground that the allegations relating to dowry and the presents are not, true According to them, only one gold chain of six sovereigns of the value of Rs. 500 was given. The statement of the plaintiff regarding the dowry to be paid to the bridegroom by the defendant's side was admitted. The main defence is that the plaintiff brought the suit in violation of the settlement arrived at between the parties, and that he is not entitled to recover the value of the jewellery or the money, or claim damage for the reason that the contemplated marriage would be void under the provisions of the Hindu Marriage Act.

4. The Court of first instance framed several issues and found on the main issues that the defendants committed default in the performance of the marriage between the parties, and that the marriage agreement is itself hit by Section 23 of the Indian Contract Act, read with Section 5(3) of the Hindu Marriage Act and dismissed the suit.

5. Aggrieved by the decree and judgment of the trial Court the plaintiff preferred an appeal. The Additional Subordinate Judge, Kakinada while concurring with the findings of the trial Court in all other respects, except us to the maintainability of the suit and also the quantum of money payable to the plaintiff, allowed the appeal and decreed the suit for a sum of Rs. 2,955 with interest thereon at 51/2 per cent, per annum from the date of the suit.

6. Mr. Chalapati Rao, the learned counsel for the appellant, has contended that the lower appellate Court tailed to see that the presents and moneys advanced were in Furtherance of an illegal contract entered into by the parties in violation of the statutory provisions and any payments made pursuant to a contract prohibited by law or opposed to public policy, is tainted with illegality and hence not recoverable. A grievance is also made by him that while the trial Court fixed the amount due at Rs. 1,250 the lower appellate Court enhanced the amount and fixed it at Rs. 2,955 without any basis whatsoever.

7. Therefore, the main question that arises for con liberation, is, despite the fact that the contract between the parties to celebrate the marriage of two minors, which is indisputedly opposed to public policy and hit by Section 23 of the Indian Contract Act and Section 5(3) of the Hindu Marriage Act, whether the plaintiff can recover the amount paid pursuant to such a contract, It is argued by Mr, Chalapathi Rao that by reason of the fact that the transaction it an illegal one, the parties were in pari delicto at the time of making the agreement, and, therefore, the plaintiff is not entitled to re cover the money. In support of his contention he has invited my attention to a case reported in Berg v. Sadler and Moore, (1937) 1 All ER 637 (643). The decision rendered in that case is to the following :--

'It is a well recognised principle that it the plaintiff in order to prove his case must set up his own illegality, he cannot succeed in his action, although it may be inequitable for the defendant to retain the money'

8. Lord Wright, Master ol the Rolls and Romer and Scott, Lord Justices, who delivered the judgment of the Court of Appeal quoted extensively from the previous cases, including from a judgment of Buckley L. I The following is the extract of what Buck-ley. L J., stated :--

It is certainly the law that the Court will refuse to enforce an illegal contract of obligations arising out of an illegal contract and I agree that the doctrine is not confined to the case of contract A plaintiff who cannot establish Ins cause of action without relying upon an illegal transaction must fail; and nonetheless is this true if the defendant does not rely upon the illegality. It the Court learns of the illegality, it will refuse to lend its aid. The rule is founded not upon any ground that either party can take advantage of the illegality, as, for instance, the defendant by setting it up as a defence. It is founded on public policy .....No Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act'

9. To the same effect was the view expressed in Bigo's v. Bousted, (1951) 1 All ER 92. It was held by Pritchard J., of the King's Bench Division, that the reason that the illegal transaction was not carried out was due, not to any repentance on the part of the defendant, but to the frustration of the contract by the plaintiff, and, therefore, as the agreement relating to the deposit of the share certificate was one which sprang from the main illegal agreement and was tainted with the same illegality as that which attached to that agreement, and as the parties were in pari delicto at the time of making the agreement, the defendant was not entitled to seek the aid of the Court to recover the certificate.

10. Great emphasis is laid by the learn-ed counsel for the appellants on the opinion expressed in the two cited cases. It. therefore, remains to be seen whether the plaintiff, by reason of the fact that the par-ties were in pari delicto at the time when they entered into the marriage agreement will be disentitled to claim the raturn of the items given as presents.

11. The Privy Council in Petherpermal Chetty v. Muniandi Servai. (1908) ILR 35 Cal 551 at p. 558 (PC) formulated the following questions:--

'(1) Is the plaintiff, despite his participa-tion in this fraudulent attempt to defeat his creditor, entitled to recover the possession of the lands purported to be conveyed?

(2) Is his right of action barred by the 91st Article of Schedule II, to the Indian Limitation Act?

The answer to the first question was given in the affirmative. The Privy Council also quoted from Mayne on the subject or benami transactions. The relevant extract from Mayne's Hindu Law reads:

'It may he very proper for a Court tosay that it will not allow him to resume theindividuality, which he has once cast offin order to defraud others. If, however, hehas not defrauded any one, there can beno reason why the Court should punish hisintention by giving his estate away to B,whose roguery is even more complicatedthan his own. This appears to be trie principle of the English decisions. But,where the fraudulent of illegal purpose hasactually been effected by means of thecolourable grant, then the maxim applies:In pari delicto potior est conditio possidentis. The Court will help neither party

'Let the estate lie where it falls.'

Their Lordships answered the questionnosed thus:

'The answer to that is that the plaintiff, m suing to recover possession of his property, is not carrying out the illegal transaction but is seeking to put every one, as far as possible, in the same position as they were in before that transaction was determined upon It is the defendant, who is relying upon the fraud, and is seeking to make a title to the lands through and by means of it And despite his anxiety to effect great moral ends, he cannot be permitted to do this. And, further, the purpose of the fraud having not only not been effected, but absolutely defeated, there is nothing to prevent the plaintiff from repudiating the entire transaction, revoking all authority of his confederate to carry out the fraudulent scheme, and recovering possession of his property.'

12. It is on the strength of this decision that Mr. Bapi Raju, the learned counsel for the respondent (plaintiff) contended that all that the plaintiff has asked for in this suit is for the return of what he had given, as, by reason of the breach of the contract, the parties had reverted to the same position as they were before they entered into this transaction.

13. Oldfield J., sitting with Bakewell j., in Srinivasa Aiyar v. Sesna Aiyar, AIR 1918 Mad 444, considered the effect of Section 23 of the Contract Act, In that case, where money was paid to induce a prospective bridegroom to marry and was paid in pursuance to a marriage brokerage contract, the question that arose for determination was, whether such money could be recovered. It was held that the contract being in affect a marriage brokerage contract and as such opposed to public policy, was void, and that the suit to recover the money paid under the agreement could lie only in the absence ot the performance of a substantial part of the agreement.

14. A Full Bench of the Madras High Court in K. Venkata Ramayya v. Y. Pullayya, ILR 59 Mad 998 = (AIR 1936 Mad 717) (FB), after reviewing the case-law on the subject held that, in order to prevent a person who has been a party to a fraudulent transaction from pleading his own fraud, the intended traud must have been effected, or there must have been a substantial part-performance of the intention to defraud. The mere fraudulent intention evidenced by the transaction is not sufficient.

15. All that has happened in the instant case is, a contract was entered into to perform a marriage which is prohibited by law and is opposed to public policy, The mere intention to celebrate such a marriage, if celebrated, will be ab initio void is not sufficient to disentitle the plaintiff from recovering what he gave as presents to the prospective bride

16. A Division Bench of this Court, consisting of Chandra Reddy, C. J. and Kumarayya J., dealing with the applicability of Section 65 of the Contract Act, held in Tavva Venkata Gurunadharao v. Badam Rosaiah, : AIR1959AP277 , that Section 65 confers a right of restitution in cases where the contract is unperformed and has no application where the parties cannot be restored to their original position, and that there should be restitutio in integrum in order to invoke Section 65. It was pointed out that, where the marriage of the parties has been consummated and they lived as husband and wife, it was impossible to restore the parties to their original position.

17. In the instant case, marriage was not performed and the parties, by reasonof the breach of the contract, have reverted to their original position, and, therefore, Section 65 of the Contract Act applies, as the contract could not be performed for a variety of reasons.

18. In another case, Peddi Virayya v. Doppalapudi Subba Rao, : AIR1959AP647 , Chandra Reddy, J. (as he then was), sitting with Qamar Hasan J., discussed the scope of Section 23 of the Contract Act, and held:

'It is now well settled that a party to an illegal contract cannot invoke the aid of a Court to have such a contract carried into effect as law will not tolerate any party to violate any moral or illegal (sic) duties. As a corollary from this principle, ii money is advanced for a purpose which is either opposed is morals or law or in furtherance of an illegal transaction, such advance is not recoverable having regard to the ex turpi causa non oritur actio. But this is subject to an exception, The law allows locus paenitentiae. So, before fraud or an illegal purpose is carried out, the money may be recovered from the person to whom it was advanced. But the Court will not render any assistance in the recovery of the money if there is even a part-performance of the illegal contract.'

Mr. Chalapathi Rao has placed great re liance on this decision and contended that here is a case where there was not even a part-performancc of an illegal contract, and, therefore, the money is not recoverable. As has been stated by Chandra Reddy, J. (as he then was), the law allows locus paeni-tentiac and the instant case is not a case where there has been any repentance on the part of the plaintiff. When the parties could not perform the contract for a variety of reasons, they revert back to their original or previous positions, and the mere fact that the contract is one prohibited by law will not disentitle the plaintiff from recovering the moneys advanced, or the presents given, so long as there is no part performance of the illegal contract

19. Basi Reddy, J., following the Full Bench Judgment in ILR 59 Mad 998 = (AIR 1936 Mad 717) (FB) and the Bench decision in AIR 1918 Mad 444, held in Second Appeals Nos. 165 of 1957 and 444 of 1956, by his judgment dated 27-8-1959, that property transferred for illegal purposes can be recovered where the purpose has not been carried out, and when the person who transferred the property repn diates the contract.

20. Narasimham, J., sitting with Chandra Reddy, C. J., in D. Satyanarayana v. Kan chupatla Appa Rao, : AIR1966AP209 , which was a case where money was advanced by way of capital to an illegal partnership and suit was laid for recovery of the money expressed the view that none of the parties to an illegal partnership can lay an action inter se for recovery of moneys invested thereunder. It was held that aparty to an illegal contract cannot invoke the aid of a Court to have such a contract carried into effect as law will not tolerate any party to violate any moral or legal duties. As a corollary from this principle, if money is advanced by way of capital for carrying on illegal partnership which partnership was actually carried out, such ex turpi causa non oritur actio.

21. Although in this case, presents and moneys were given for an illegal purpose, namely, to celebrate the marriage of two minors, who had not attained the requisite age, as prescribed by the Hindu Marriage Act, the purpose itself was not carried out and the contract was repudiated, and in cases of this nature money is recoverable as the parties revert back to their original or previous positions as there could be no, question of any pait-performance of marriage. It is only in cases where there is part-performance of illegal contract the Court will not render assistance in the recovery of moneys advanced for any illegal purpose. Therefore, the right to restitution of moneys advanced in cases where the contract is unperformed is not lost as the parties are restored to their original positions. The lower Appellate Court has rightly held that the monies are recoverable and I am in complete agreement with its finding.

22. The next question that arises for consideration is, whether the amount determined by the lower Appellate Court as the amount recoverable is based on the evidence adduced by the parties. The lower Appellate Court found that the trial Court had not considered all the relevant facts in arriving at the sum recoverable from the defendants, and fixed the total amount payable at Rs. 2,955. This is purely a finding of fact and I do not propose to interfere in a second appeal.

23. In the result the second appealfails and is dismissed with costs. No leave.


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