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Sheikh Vilayat HussaIn and anr. Vs. Musammat Misran and ors. - Court Judgment

LegalCrystal Citation
CourtAllahabad
Decided On
Judge
Reported inAIR1923All504; 72Ind.Cas.92
AppellantSheikh Vilayat HussaIn and anr.
RespondentMusammat Misran and ors.
Cases ReferredRaghupati Chatterjee v. Nrishingha Hori Das
Excerpt:
fraud - fraud accomplished--estoppel--equity--defence of in pari delicto. - - 1. this is an interesting case which has given rise to a discussion as to under what circumstances a defendant can properly plead and rely upon facts showing that he and the plaintiff were in pari delicto. there are many other english authorities to that effect, but the most concise summary of the law is to be found in broom's legal maxims, 8th edition, at page 561 and 562. once it is established that the parties are in pari delicto the court will not assist an illegal transaction in any respect, that is to say, the person who has asked the court to do something in his favour will fail. where each party is equally in fault, the law favours him who is actually in possession, a well-known rule which is in fact..........a defendant can properly plead and rely upon facts showing that he and the plaintiff were in pari delicto.2. the circumstance are as simple as they can be, sheikh vilayet hussain and musammat imaman were, on the 12th of september 1904, indebted to various creditors. there was at least one decree outstanding which was in the course of execution. in that position of affairs they turned to muhammad ismail, who was a friend and who agreed with them that a fictitious deed of sale of property should be executed in his favour so that that might serve as a shield against the demands of creditors. that deed of sale was in fact executed on the 12th of september 1904 and no consideration passed from murtammad ismail to the ostensible vendors. muhammad ismail put forward a claim and gos this.....
Judgment:

Grimwood Mears, C.J.

1. This is an interesting case which has given rise to a discussion as to under what circumstances a defendant can properly plead and rely upon facts showing that he and the plaintiff were in pari delicto.

2. The circumstance are as simple as they can be, Sheikh Vilayet Hussain and Musammat Imaman were, on the 12th of September 1904, indebted to various creditors. There was at least one decree outstanding which was in the course of execution. In that position of affairs they turned to Muhammad Ismail, who was a friend and who agreed with them that a fictitious deed of sale of property should be executed in his favour so that that might serve as a shield against the demands of creditors. That deed of sale was in fact executed on the 12th of September 1904 and no consideration passed from Murtammad Ismail to the ostensible vendors. Muhammad Ismail put forward a claim and gos this very property released from the operation of the decree. Therefore, the contemplated fraud was successfully carried out. It is probable Muhammad Ismail collected the rents for some period, but if this was done, it was only to make the transaction of the 12th of September 1904 appear to be a genuine and valid one. Under some circumstances which are not very clear, on the death of Muhammad Ismail. Vilayet Hussain and Musammat Imaman got possession of the house and began to collect the rents themselves. In this way they asserted possession and dominion over the house in question. That was 5in the year 1909.

3. On the 30th of June 1917, after a lapse of some nine years, the plaintiffs, who are the heirs of Muhammad Ismail, brought the suit to recover possession on the strength of the sale-deed of the 12th of September 1904.

4. It is now important to turn to the pleadings to see how the case was framed by the parties. As one would expect, the pleading in the plaint was quite simple; it was based upon a sale-deed, the death of Muhammad Ismail and. the realisation of rents by the defendants. To that apparently genuine claim the defendants set up what they contended was the true story; that is to say, they drafted pleas which showed, if they were true, and as they were subsequently found to be true, that Vilayet Hussain and Muhammad Ismail were in pari delicto, that is to say, not one man but both were jointly engaged on a fraud in which each was equally culpable.

5. If that written statement was a written statement in accordance with the rules and with the procedure, then it had to he considered by the Court and proper issues framed. No body seems to have suggested that the pleading was not in any way proper and indeed there can be no question that this pleading was the proper pleading, and the points urged in it and the facts set out in it were proper to be raised and those which it was the duty of the Court to consider, and in fact the Court did consider this matter and the Court allowed the genuineness of the document to be impeached.

6. In all cases where a plaintiff is relying upon a deed, the defendant is entitled as of course to give evidence of the circumstances under which the document came into existence. When those circumstances embrace and include an allegation of a joint fraud by both plaintiff and. defendant, the particulars of that fraud must be pleaded ; and it is then the duty of the Court to look into the matter, and if the Court comes %p the conclusion that the parties were acting together with a view to perpetrate a fraud, and did in fact perpetrate that fraud, and that there is no difference in the degree of guilt of the plaintiff (who is asking the Court to give him some help) and that of the defendant, the duty of the Court is not to assist either party: in other words, the duty of the Court is to dismiss the claim, because the Court having then in its knowledge that it has before it two persons equally guilty of fraud will not assist either of them.

7. The position, therefore, of this matter is that the decision of the lower Appellate Court is the right decision and that decision must be restored. But, inasmuch as there has been considerable discussion on this matter, it may be useful, without going into great length, to mention some authorities so that there can be no question as to the propriety of pleading, and entertaining any evidence of the allegations of a joint and equal fraud of plaintiff and defendant. An example of that type of pleading will be found in Taylor v. Chester (1869) 4 Q.B. 309 at p. 312 : 10 B. & S. 237 : 38 I.J.Q.B. 225 : 21 L.T. 359. There, by way of a special reply, all the facts were stated which went to show that; if those facts were true, the plaintiff and defendant were in pari delicto. It may be notice that in that case the defendant took issue on the reply and raised the precise question as to whether a pleading of this nature was a fit and proper pleading to be entertained by the Court, The Court decided that it was, went into the whole facts of the case and in the course of its judgment said: 'The maxim in pari delicto potior est conditio possidentis' is as thoroughly settled as any proposition of lawycan be. It is a maxim of law established, not for the benefit of plaintiffs or defendant, but is founded on the principles of public policy which will not assist a plaintiff who has paid over money, or handed over property in pursuance of an illegal or immoral contract, to recover it back, for the Courts will not assist an illegal transaction in any respect.' The Court also pointed out the further proposition that if a plaintiff can go into a Court and make out a complete case without himself disclosing any fraud, then he may be entitled to recover. In all cases, however, where a plaintiff has to produce a document, he can either by interrogatories, or when he is actually present in the box be asked questions under cross-examination which will show that his first story to the Court as regards the circumstances under which the document was executed is not a true story, and the defendant then is entitled, if he has put on record the proper pleadings, to go into the whole of the circumstances and show that each party is in pari delicto. There are many other English authorities to that effect, but the most concise summary of the law is to be found in Broom's Legal Maxims, 8th Edition, at page 561 and 562. Once it is established that the parties are in pari delicto the Court will not assist an illegal transaction in any respect, that is to say, the person who has asked the Court to do something in his favour will fail. Not only, says the learned author, in acquat jure but likewise in pari delicto, is it true that potior est conditio possidentis; where each party is equally in fault, the law favours him who is actually in possession, a well-known rule which is in fact included in that more comprehensive maxim to which the present remarks are appended. If said Buller, J., 'a party comes into a Court of Justice to enforce an illegal contract, two answers may be given to his demand, the one, that he must draw justice from a pure fountain and the other that potior est conditio possidentis.'

8. Our attention has been drawn to the case of Sidlngappa v. Hirasa 31 B. 405 at p. 410 : 9 Bom. L.R. 542 and it is contended that the facts of that case are so identical with the facts of the case under consideration that we are course by the course that that case took. If one studies that case, one will see that no attention was concentrated upon the question with which we are concerned here, which is whether a defendant can in a pleading raise facts which show that he and the plaintiff were in pari delicto. If he can raise such facts, he is entitled to prove such facts; and if he proves such facts, he can bring himself within the1 principle of law which has been laid down in the case to which we have referred above, and in others which are to be found appended to the notes in Broom's Legal Maxims. The Court was referred to Doe d. Roberts v. Roberts (1819) 2 B. & Ald. 367 : 20 P.R. 477 : 106 F.R. 401 but the Court does not seem to have paid any attention to the principle of in pari delicto potior est conditio defendentis and that case is certainly not in harmony with the principle of subsequent decisions of which Taylor v. Chester (1869) 4 Q.B. 309 at p. 312 : 10 B. & S. 237 : 38 I.J.Q.B. 225 : 21 L.T. 359 (supra) and Herman v. Jeuchner (1885) 15 Q.B.D. 561 : 54 L.J.Q.B. 340 : 53 L.T. 94 : 33 W.R. 606 : 49 J.P. 502 are characteristic examples and appears to us of doubtful authority. The essence of the case now under consideration is that the defendants set up the joint iniquity of Vilayet Hussain and Muhammad Ismail they were alleging through the concerted plan by which both the plaintiffs and defendant in equal degree of wrong-doing defendant had agreed to take a course which would defeat, and did in fact defeat creditors. In the case of Sidlingappa v. Hirasa 31 B. 405 at p. 410 : 9 Bom. L.R. 542 this point does not appear to have been urged upon the Court; at all events, it finds no place in the judgment. We have no doubt whatever that the practice is that a defendant may always allege facts, that he and the plaintiff were together jointly equally guilty of a contemplated and executed fraud. Provided the pleading contains proper facts an issue has to be found on that, and if it is established to the satisfaction of the Court that the plaintiff and defendant were jointly and equally engaged upon a fraud, it is then the duty of the Court to give no assistance to the plaintiff; the position being that the plaintiff must come into Court with clean hands.

9. On the question of pari delicto one has to consider all the facts, and that requires an examination of the circumstances attending the execution of the document if it be a document which is impeached. In this case the wrong-doing was in and around the 12th of September 1904. The parties who were guilty of that wrongdoing were Vilayet Hussain and Muhammad Ismail. Neither of them could have obtained any assistance from any Court after the contemplated fraud had been carried out, and that bar applies also to people claiming directly through them.

10. Mr. Uma Shanker Bajpai after the close of the arguments and indeed after delivery of judgment called our attention to the very recent case of Raghupati Chatterjee v. Nrishingha Hori Das 71 Ind. Cas. 1 : 35 C.L.J. 491 : (1923) A.L.R. (C.) 90. There the Calcutta High Court on a full consideration of all the authorities came to the same conclusion at which we have arrived.

11. We are, therefore, of opinion that this appeal must be allowed and the decree of the learned Judge of this Court set aside and the decree of the lower Appellate Court restored. The result will be that the plaintiff's suit will be dismissed. Each party must pay his own costs throughout.

Banerji, J.

12. I agree.


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