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Durga Prasad Sharma Vs. Sadasib Biswal - Court Judgment

LegalCrystal Citation
SubjectContract
CourtOrissa High Court
Decided On
Case NumberSecond Appeal No. 475 of 1964
Judge
Reported inAIR1969Ori171; 34(1968)CLT1227
ActsCode of Civil Procedure (CPC) , 1908 - Sections 11 - Order 8, Rule 6; Contract Act, 1872 - Sections 65 and 70
AppellantDurga Prasad Sharma
RespondentSadasib Biswal
Appellant AdvocateMurlidhar Patra and ;Damodar Mohanty, Advs.
Respondent AdvocateB. Mohapatra, Adv.
DispositionAppeal dismissed
Cases ReferredState of West Bengal v. B.K. Mondal
Excerpt:
.....the contention now advanced: 1) acknowledging his liability for the amount on 19-6-59. the suit was filed on 18-6-62 within three years of that date, and as such, the suit is clearly within time. the onus being on the defendant who has set up the plea of res judicata, he should have filed the plaint as well as the judgment of the earlier suit instead of remaining content only by filing a copy of the written statement and decree. ' if the aforesaid conditions are satisfied, a person who has enjoyed the benefit is bound to make compensation or restore the benefit received. defendant has undoubtedly enjoyed the benefit of the plaintiff agreeing to such adjustment of his dues. thus, all the ingredients necessary to attract section 70 of the contract act are fully satisfied...........the balance of rs. 1,872/-, it was agreed that defendant would execute a sale deed and transfer bhogra lands described in schedule a of the plaint after abolition of gountiaship and conversion of bhogra into raiyati. the settlement was endorsed in writing in the note book marked ex. 1. plaintiff continued to serve defendant till chaitra 1960 and for the subsequent period arrears of salary amounted to rs. 300/-. due to some differences between the parties, defendant filed t. s. no. 41/60 in the court of munsif, bamra for declaration of his right, title and interest in the a schedule lands which was decreed in his favour. therefore, plaintiff claims to be entitled to recover rs. 1,872/- which had been agreed to be adjusted towards the sale plus rs. 300 towards arrears of salary for the.....
Judgment:

A. Misra, J.

1. This second appeal has been preferred by the defendant against a modifying judgment. The plaintiff-respondent was an employee of the defendant. On 19-6-59, there was a settlement between the parties at which it was ascertained that defendant was to pay in all Rs. 2,482 (Rs. 1,620/- towards arrears of salary plus Rs. 862/- alleged to have been spent by plaintiff in the management of defendant's properties). This liability was acknowledged by the defendant who paid Rs. 610/- in cash and for the balance of Rs. 1,872/-, it was agreed that defendant would execute a sale deed and transfer bhogra lands described in Schedule A of the plaint after abolition of gountiaship and conversion of bhogra into raiyati. The settlement was endorsed in writing in the note book marked Ex. 1. Plaintiff continued to serve defendant till Chaitra 1960 and for the subsequent period arrears of salary amounted to Rs. 300/-. Due to some differences between the parties, defendant filed T. S. No. 41/60 in the Court of Munsif, Bamra for declaration of his right, title and interest in the A schedule lands which was decreed in his favour. Therefore, plaintiff claims to be entitled to recover Rs. 1,872/- which had been agreed to be adjusted towards the sale plus Rs. 300 towards arrears of salary for the post-settlement period which comes to Rs. 2,172/-. He, however, filed the suit to recover Rs. 1,995/- relinquishing the balance. Defendant admits to have accepted the liability under the settlement dated 19-6-59 as alleged. He, however, states that he agreed to the plaintiff's proposal to possess the A Sch. Bhogra lands for few years in satisfaction of his claim on the understanding that if the bhogra lands would be converted into raiyati, plaintiff would purchase the same at the then market rate. Subsequently, however, plaintiff declined to take the lands and demanded payment of his dues amounting to Rs. 1872/-. Therefore, defendant withdrew Rs. 2,000 in two instalments from his postal savings bank account on 4-7-59 and 7-7-59 and made full payment of the plaintiff's dues. Alternatively, he has pleaded that even if the alleged payment of Rs. 1,872/- by him is not believed, plaintiff will not be entitled to get refund of the money as the contract for sale of bhogra lands was illegal and void ab initio. He asserts to have fully paid the salary of plaintiff for the period of his service subsequent to July, 1959. In addition, he also resists the claim on the ground of limitation as well as res judi-cata.

2. The trial court disallowed the entire claim so far it relates to the period prior to 19-6-59 and decreed the claim relating to the subsequent period in part for Rs. 300/- only on the following findings; (1) the settlement between the parties on 19-6-59 so far the claim related to the period prior to that date is final and conclusive and suit is not barred by limitation having brought within three years from the date of settlement where liability was acknowledged by defendant; (2) the payment of Rs. 1,872/- on 7-7-59 as alleged by defendant in satisfaction of plaintiff's claim is proved; (3) even if the alleged payment is not believed, plaintiff is not entitled to get refund of the consideration of the agreement dated 19-6-59 as the contract was void ab initio; (4) the claim for refund of Rs. 1,372/- is barred by principles of res judicata; (5) payment of Rs. 100 towards arrears of salary for the period subsequent to July, 1959 by the defendant to the plaintiff is proved and the balance of Rs. 200 only remained outstanding; (6) defendant having failed to pay court-fee towards his claim of usufruct of the A Sch. lands for the year 1959 alleged to have been appropriated by the plaintiff, no finding on it can be given.

3. Plaintiff preferred an appeal against the part of the judgment and decree disallowing a substantial portion of his claim, while defendant filed cross-objection so far the trial court decreed the suit in part against him for Rs. 200/-. The lower appellate court rejected the cross-objection in totp, reversed the other findings of the trial Court, except the finding that defendant had paid Rs. 100 to the plaintiff subsequent to July, 1959, allowed the appeal and decreed the suit for Rs. 1895/-. It held that the alleged payment by defendant to the plaintiff on 7-7-59 is not proved and that plaintiff is entitled to refund of the consideration as the contract dated 19-6-59 was not void ab initio.

4. Appellant challenges the judgment and decree of the lower appellate court on the following grounds; (1) the finding of the lower appellate court disbelieving the alleged payment of Rs. 1,872/- by defendant to plaintiff on 7-7-59 is erroneous; (2) the courts below have erred in disallowing adjustment of the usufruct of the A Sch. bhogra lands appropriated by the plaintiff in the year 1959; (3) the suit is barred by limitation; (4) the suit is barred by principles of res judicata and (5) the claim for refund of consideration is not maintainable as the contract for sale of bhogra lands was void ab initio to the knowledge of the plaintiff.

5. Point No. 1 -- The trial court accepted the plea of payment alleged by defendant in full satisfaction of the plaintiff's claim relying on the sole testimony of defendant and treating the withdrawal of Rs. 2,000 by him in two instalments on 4-7-59 and 7-7-59 from the postal savings Bank as providing corroboration. The lower appellate court on an assessment cf the evidence and consideration of the circumstances and the conduct of the parties reversed the finding of the trial court and rejected the alleged plea of payment. This is clearly a finding of fact which is not assailable in second appeal. Apart from it, on merits, I entirely agree with the reasons which weighed with the lower appellate court in disbelieving this alleged payment by the defendant. Therefore, this contention has no merit.

6. Point No. 2:-- It is contended for the appellant that the amount of usufruct received by the plaintiff from the bhogra lands during the year 1959 should have been allowed to be adjusted against the claim. This contention has been negatived by both the courts below on the ground that the same has not been pleaded as a set-off or a counter claim and court-fee paid thereon. Learned counsel for appellant contends that a plea of adjustment is distinct from a plea of set off or a counter claim, and in the case of the former Order 8, Rule 6 C. P. C. is not applicable. In support of this contention, he has placed reliance on the decisions reported in AIR 1955 Hyd 176, Konda Pentiah v. Chenchu Rangia and AIR 1955 Pat 320, Sarangdhar v. Lakshmi Narayan. These two decisions do not support the contention advanced. The plea of adjustment to which Order 8, Rule 6 C. P. C. will not be applicable can be raised only where prior to the date of suit an adjustment had already been effected. The following observations in the Patna decision referred to above clearly negative the contention now advanced:

'Whether the claim of the appellant be considered to be a legal set-off or a counter claim, the appellants had to pay court-fees on their claim. This they did not do, and the courts below were right in not considering the appellants' claim when they did not pay the court-fees thereon.'

It is neither in the pleading nor was it sought to be made out during trial that prior to the institution of the suit there was any adjustment between the parties of the usufruct alleged to have been received by the plaintiff in the year 1959. Therefore, the Courts below have rightly negatived this contention.

7. Point No. 3. -- Coming to the question of limitation, it is not disputed that plaintiff was an employee on a monthly salary and there were arrears outstanding against the defendant. These arrears were ascertained, the amount spent by plaintiff in the course of mangement of defendant's properties was added to it and the defendant in his own hand made the endorsement (Ex. 1) acknowledging his liability for the amount on 19-6-59. The suit was filed on 18-6-62 within three years of that date, and as such, the suit is clearly within time.

8. Point No. 4 -- It is contended that the present claim is barred by res judicata, because in T. S. No. 41/60 the alternative claim of the present plaintiff who was defendant therein for refund of Rs. 1,872/- was not allowed. Therefore, it is argued that such a claim must be deemed to have been negatived in the previous litigation and hence the present suit is barred by res judicata. In support of this contention, reliance has been placed on the decisions reported in AIR 1964 Pat 174 (FB), Lalbihari v. Sheo Shankar Prasad; AIR 1965 SC 1150, Devilal v. Sales Tax Officer. Both these decisions are quite distinguishable. They relate to cases where on merits a decision had been taken in the previous litigation, though certain grounds had not been urged in the earlier proceeding. Therefore, it was held that a fresh challenge on different grounds will not be available being barred ay principles of res judicata. In order that section 11 C. P. C. may apply to any particular case, it is necessary that the matter directly and substantially in issue in the subsequent suit must have been directly and substantially in issue in the former suit; that the former suit must have been between the same parties; that the parties must nave been litigating under the same title in the former suit and the matter in issue in the subsequent suit must have been heard and finally decided in the earlier one. The question whether a matter was raised, heard and finally decided is one of fact to be determined on the circumstances of each particular case and the burden of establishing the plea of res judicata is always on the party who sets it up. The trial court in Para 13 of its judgment by referring to Para 1 of the written statement (Ex. C) and the decree (Ex. D) filed in the previous suit which contain absolutely no reference to the said claim came to the conclusion that the claim was either not granted or it was not pressed. Learned counsel for appellant relying on Explanation 4 to Section 11 C. P. C. contends that though Ex. p makes no reference to the court's finding or decision on any such claim, it should be deemed to have been a matter directly and substantially in issue in such suit and heard and finally decided therein. The onus being on the defendant who has set up the plea of res judicata, he should have filed the plaint as well as the judgment of the earlier suit instead of remaining content only by filing a copy of the written statement and decree. In the circumstances of the present case, in the absence of proof of the pleadings and judgment in the previous suit, the plea of res judicata cannot be accepted; vide AIR 1955 Orissa 28, Mst. Rupa v. Mst. Sriyabati. Apart from it, the claim in the previous suit (T. S. 41/60) by the defendant was for declaration of his title to and confirmation of possession of the A Sch. Bhogra lands on the ground that the present plaintiff had not acquired any title therein. A decision on the plaintiffs' right to refund or recover the amount claimed now was not directly or substantially in issue in the earlier suit nor was a decision on such an issue necessary for grant of relief in the earlier suit. There is no material on record and Ex. p does not show that in the previous suit plaintiffs' right to recover the amount now claimed was heard or decided. Therefore, taking any view of the matter, the contention of appellant that the present claim is barred by res judicata is not tenable.

9. Point No. 5 -- The only other point which has been urged by learned counsel for appellant with some emphasis is that the contract for sale of bhogra lands being void ab initio to the knowledge of the parties, Section 65 of the Contract Act is not attracted, and as such, plaintiff will not be entitled to refund of the consideration. This contention found favour with the trial court, but was negatived by the lower appellate Court. It is urged that Section 65 of the Contract Act will apply only where the contract was legal at the inception but became void due to happening of some subsequent event or where it is subsequently discovered that the contract is void. In the present case, when to the knowledge of both parties the contract was void ab initio. Section 65 will have no application.

10. The above contention is not sustainable on the pleading of the parties. The averments contained in para 4 of the plaint and para 7 of the written statement do not disclose that there was any agreement to sell bhogra lands as such. From the averments in the above two paragraphs, the common case of the parties appears to be that what was agreed to on 19-6-59 was not for sale of bhogra lands but for sale of the A Sch. lands, if subsequently by legislation or otherwise they were converted into raiyati and sale became permissible under law. This being the contract as disclosed in the pleadings, it is not correct for appellant to contend that the agreement was for sale of bhogra lands, and as such, it was void ab initio to the knowledge of both parties. Therefore, as has been observed by the lower appellate Court, this contention of appellant is not tenable.

11. Next it is contended for appellant that even if it be held that the contract was not for sale of bhogra lands, still the agreement is void on grounds of uncertainty, because the performance of the contract depended on the contingency of happening of a future event, i. e. abolition of gountiaship and conversion of bhogra into raiyati. Such a contention appears to have been raised lor the first time in second appeal. Further, though a contingent contract to do or not to do anything is not enforceable in law unless and until the event happens, such a contract is not void ab initio but becomes void only where happening of the event subsequently becomes impossible. Therefore, it is not correct to say that to the knowledge of the parties it was void ab initio, and as such, outside the scope of Section 65 of the Contract Act.

12. It is next argued that if it is treated as a contingent contract, an obligation on the part of defendant to perform his part of the agreement of effecting a sale will arise only on the happening of the event of conversion of bhogra into raiyati. No time limit for such performance has been prescribed. Therefore, when the possibility of the contingency happening in future cannot be eliminated, it is not open to plaintiff to claim refund of the consideration. Such a contention, in my opinion, is not sustainable on the facts and circumstances of the present case. In para 7 of the written statement, the specific case of defendant is that subsequent to the date of agreement plaintiff proposed to resile from it and demanded back his dues in cash. Defendant agreed to such a request. This, in short, according to defendant's own pleading, means that the agreement for sale of the bhogra lands on their conversion into raiyati was put an end to by the consent of both parties. Therefore, it is futile for him now to contend that the contingent contract still subsists. Again, it is an admitted fact that defendant filed T. S. No. 41/60 for declaration of title to and recovery of possession or confirmation of possession of the A Sch. lands and obtained a decree. The filing of the suit had the effect of resiling from the contract and amounted to a breach by the defendant. It is not open to him now to contend that the contract still subsists and defendant will be liable to perform his part only if and when the contingency of conversion of bhogra takes place at some future date.

13. Apart from the merits of the contentions advanced for appellant which have been dealt with above, the question is whether plaintiff will be entitled to refund of the amount whether it be under Section 65 or other provision of the Contract Act. Section 70 of the Contract Act lays down as follows:--

'70. Where a person lawfully does anything for another person, or delivers anything to him not intending to do so gratuitously and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore the thing so done or delivered.'

The necessary ingredients to attract this provision are: firstly, a person lawfully doing anything for another or delivering anything to him; secondly, not intending to do so gratuitously and thirdly, the other person enjoying the benefit thereof. The provision contained in Section 70 of the Contract Act strictly speaking, is not based on contract, but it embodies equitable principles of restitution and prevention of unjust enrichment. In the decision reported in AIR 1962 SC 779, State of West Bengal v. B.K. Mondal & Sons it has been observed :

'What Section 70 prevents is unjust enrichment.'

If the aforesaid conditions are satisfied, a person who has enjoyed the benefit is bound to make compensation or restore the benefit received. From the conduct of the parties as reflected in their pleadings and the circumstances proved, it is clear that the parties proceeded to enter into the agreement under the belief that goun-tia tenures were going to be abolished resulting in conversion of Bhogra into raiyati which will make the lands transferable. The contract in the present case, therefore, was a contingent one where the plaintiff agreed to the adjustment of the amount acknowledged to be due to him for obtaining a sale in future on the happening of the contingency. Such a contract is not unlawful. Secondly, it cannot be denied that plaintiff did not intend to allow adjustment of the amount due to him and accept satisfaction of the liability by the defendant gratuitously, because the admitted case is that in return for the amount defendant was to convey title in respect of the lands to, him after conversion into raiyati. Defendant has undoubtedly enjoyed the benefit of the plaintiff agreeing to such adjustment of his dues. Thus, all the ingredients necessary to attract Section 70 of the Contract Act are fully satisfied. Therefore, plaintiff is entitled to restoration of the benefit enjoyed by defendant and refund of the amount both under Section 65 as well as under Section 70 of the Contract Act.

14. Thus, none of the contentions urged on behalf of appellant has any merit. In the result, the appeal fails and is dismissed with costs.


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