Skip to content


Lakshmana Prasada and Sons Vs. A. Achuthan Nair - Court Judgment

LegalCrystal Citation
SubjectMotor Vehicles
CourtChennai High Court
Decided On
Case NumberCity Civil Court Appeal No. 10 of 1950
Judge
Reported inAIR1952Mad779; (1952)IMLJ705
ActsContract Act, 1872 - Sections 19, 65 and 72; Madras Civil Motor Cars Control Order, 1947 - Sections 4 and 5
AppellantLakshmana Prasada and Sons
RespondentA. Achuthan Nair
Appellant AdvocateK. Bhashyam Iyengar and ;P.V. Subramaniam, Advs.
Respondent AdvocateK.P. Raman Menon, Adv.
Disposition Appeal dismissed
Cases ReferredJagadish Prasad v. Produce Exchange Corporation
Excerpt:
.....collected by appellants in excess of controlled price - no consent obtained from respondent by appellants for sale and purchase of vehicle by means of any fraud or misrepresentation so as to make contract voidable and to make it necessary for respondent to return car and claim back entire price paid by him to appellants - no evidence to show that money paid in excess of controlled price intended to be given away as gift or present to appellants by any means - section 72 applicable - appellant liable to return excess money paid under a mistake as to fact of price. - .....think that it was not necessary for the respondent to return the car and claim back the entire price paid by him to the appellants. 5. the next contention raised by the learned counsel for the appellants is that in so far as the appellants sold the car in contravention of the price fixed by the provincial government under their notifications, the contract itself was an illegal one being against the control order, and therefore section 65 of the contract act would attract itself to the contract in question. section 65 of the contract act reads thus: 'when an agreement is discovered to bs void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he.....
Judgment:

Basheer Ahmed Sayeed, J.

1. The defendants are the appellants in this appeal. They have preferred this appeal against the judgment and decree of the learned Additional City Civil Judge decreeing the suit brought by the respondent for recovery of a sum of Rs. 1555 alleged to have been collected illegally from the respondent.

2. The defendants are dealers of 'Hindustan-10' motor vehicles and on the 22nd January 1948, the appellants sold one 'Hindustan-10' car to the respondent for the sum of Rs. 9350 which they believed and represented to be the controlled price for the said vehicle exclusive of taxes and other charges. The respondent also paid the price in the belief that the price represented by the appellants was the controlled price, but subsequently the respondent learnt that the price fixed by the Government was only Rs. 8195 for the said 'Hindustan-10' motor vehicle and that the appellants had collected in excesy a sum of Rs. 1155.

After this knowledge, the respondent called upon the appellants by notices to refund the excess collected by the appellants over and above the controlled price fixed by the Government. The appellants declined to refund the said excess denying that they collected any excess over the controlled price and stating that they collected only the price approved by the Provincial Motor Transport Controller, that there was no misrepresentation by the appellants in the matter of the price and that even if there was any such misrepresentation, the respondent not having rescinded the contract, he was not entitled to recover the excess now claimed, either by way of damages or otherwise and that interest was also not payable. The learned Additional City Civil Judge after framing the issues referred to in his judgment, accepted the case of the respondent and decreed the suit.

3. The learned counsel appearing for the appellants now contends that there was no evidence adduced to show that the price of the vehicle in question was only Rs. 8195 on the date when the vehicle was sold and that in so far as the appellants acted in pursuance of circular No. 61 contained in Ex. A. 4 (a), which was approved by the Provincial Motor Transport Controller, they were justified in retaining the entire sum paid by the respondent towards the price of the vehicle. On this point, two Gazette Notifications have been produced by the respondent's counsel. They are dated 6th June 1947 published on the 17th June 1047 and 17th April 1948 published on the 27th April 1.948. A reading of these two notifications makes it clear that the price fixed by the Provincial Government for a vehicle of the kind in question was only Rs. 8195 & not Rs. 9350 paid for by the respondent. ' From a reading of Clauses 4 and 5 of the Madras Civil Motor Cars Control Order, 1947, it is also evident that the power to fix the price for motor vehicles vests only with the Provincial Government and not with the Provincial Motor Transport Controller.

Such a price having been fixed by the notifications referred to above, the first notification fixing the price at Rs. 8195 and the second notification fixing the price at Rs. 7700 and the second notification superseding the previous notification and there being no other notifications in between the two notifications referred to above, it is fairly clear that the price for which the motor vehicle in question should have been sold in December 1947 was only Rs. 8195 and not anything in excess thereof. Therefore circular No. 61 referred to in Ex. A. 4 (a) relied upon by the appellants was of no avail a_s it could not be considered to be an authorised fixation of the price for the vehicle in question. Nothing has been produced to show that the Provincial Government had delegated the power to the Provincial Motor Transport Controller to fix the price at the figure given in the circular and approved cf by him. In these circumstances, it has to be held that the authorised price for which the vehicle could have been sold was only Rs. 8195 so that when the respondent paid a sum of Rs. 9350 the difference collected by the appellants is in excess of the controlled price. There is therefore no substance in the contention on behalf of the appellants that they had sold the vehicle for the proper price.

4. The next contention raised by the learned counsel for the appellants is that the respondent having alleged misrepresentation on the part of the appellants in inducing the respondent to pay more than the controlled price, Section 19 of the Indian Contract Act came into operation and under that section, agreement between the parties was voidable, and the respondent not having avoided the contract by returning the vehicle which he had purchased from the appellants which it was open to him to do, he cannot now claim the excess amount paid by him over and above the controlled price. I cannot agree that there is any force in this contention, for though there are certain allegations in the plaint which might lead to an inference that the respondent has relied upon the ground of misrepresentation, still, in my opinion, the general tenor of the plaint, as I read it, is not that the respondent relies solely upon any misrepresentation on the part of the appellants in inducing him to part with the excess sum but that he has simply made use of this argument as an additional ground to strengthen his claim for the excess, the actual basis of the claim being that while the price actually fixed by the Provincial Government was only Rs. 8195, the appellants had collected a sum which was over and above the price actually fixed and that such collection was not justifiable and that the appellants cannot retain the said excess for themselves.

That accounts for the reason why the plaintiff-respondent did not think of avoiding the contract by returning the car to the appellants. If he had really conceived that the vehicle had been sold to him under a misrepresentation, he would have certainly returned the car and claimed the entire amount paid by him. The fact however is that at the time when the car was purchased by the respondent and sold by the appellants, both the parties were under the bona fide belief that the price of the car was as collected by the appellants and as exhibited by the appellants on their notice board in their show room. It was only after the purchase had been made and the respondent had taken delivery of the vehicle, that the respondent came to know that the price was much lower than what was actually paid by him.

The evidence on the record in this case does not support the view that the respondent was led into any belief that the price was Rs. 9350 by means of any misrepresentation made by the appellants. The appellants had in their possession the circular No. 61 contained in Ex. A. 4 (a) and they were under the impression that that was the price at which they were entitled to sell their vehicle; and the respondent also at thai time was under the impression that the correct price was the one demanded by the appellants. Therefore, it cannot be said that there was any consent obtained from the respondent by the appellants for the sale and purchase of the vehicle by means of any fraud or misrepresentation so as to make the contract voidable and so as to make it necessary for the respondent to return the car. I therefore think that it was not necessary for the respondent to return the car and claim back the entire price paid by him to the appellants.

5. The next contention raised by the learned counsel for the appellants is that in so far as the appellants sold the car in contravention of the price fixed by the Provincial Government under their notifications, the contract itself was an illegal one being against the Control Order, and therefore Section 65 of the Contract Act would attract itself to the contract in question. Section 65 of the Contract Act reads thus:

'When an agreement is discovered to bs void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received it.'

The contention of the learned counsel for the appellants is that inasmuch as during the period when the contract came Into existence there was great scarcity of cars in the market and the respondent having taken delivery of the car from the appellants which he would not have ordinarily got in those circumstances, and there being no compulsion on the part of dealers in motor vehicles to sell their vehicles to any particular individuals, though the Government had reserved to itself only the right to fix the price at which the car could be sold, it was therefore incumbent upon the respondent to have returned the car to the appellants if he had discovered that the contract was void in that it was against the Control Order, and the respondent not having restored the advantage he got to the appellants he is not now entitled to claim the excess which he had paid to the appellants.

His contention is that the respondent having received an advantage in that he was the person who purchased the car in difficult circumstances he should have restored that advantage to the appellants if he were to claim back the price which he paid and he not having done so in spite of the fact that he discovered the contract to be void as being against the Control Order, the appellants are not called upon to pay hack any excess over and above the controlled price. The learned counsel for the appellants has invited my attention in this connection to the decision in 'Jagadish Prosad v. Produce Exchange Corporation, Ltd.,' AIR 1946 Cal. 245 and contends that inasmuch as the respondent has not rescinded the contract and has retained the car to himself and he not having been in a position to return the car either as he had used it for his benefit, he cannot be allowed to claim the refund. The point urged by the learned counsel is that when there is an illegal or a void contract both the parties to the contract must be put back to the original position in which they were before the contract and since that has become impossible in the circumstances of the present case, the respondent alone could not be permitted to claim the excess that he is said to have paid towards the price of the car without restoring the car itself to the vendor.

I do not think that it is possible for me to accept this contention of the learned counsel for the appellants, nor could I agree that the facts in the present case lend themselves to the application of the reasoning contained in the decision referred to by the learned counsel for the appellants. For the price the respondent paid he got the car and it cannot he said that he got any extra advantage by the transaction. On the other hand the extra advantage gained by the appellants would seem to be the excess over the controlled price which he is hound to refund. The learned counsel for the appellants has also invited my attention to certain decisions such as 'Seddon v. North Eastern Salt Co. Ltd.,' (1905) 1 Ch. 326 and 'Oriental Govt. Security Life Assurance Co. Ltd. v. Narasimhachari'; 25 Mad. 183 in this connection. I do not think these decisions apply to the facts of the present case, for. I think, this case is one which comes directly under Section 72 of the Contract Act. The simple fact in this case is that money has been paid in excess of the controlled price under a mistake of fact.

Both the parties, as I have already observed, have bona fide been under the impression and belief that the price at which the vendor could sell and the vendee could purchase was Rs. 9350, but it later transpired that the sum of Rs. 9350 had been received by the vendor and paid by the vendee under a mistake, while the controlled price was only Rs. 8195 on the date of the transaction as fixed by the Provincial Government in their notifications referred to above, about both of which the parties were not aware. Money having been paid under a mistake of fact that the price was what was quoted by the appellants and not otherwise, and when it became known to both the parties that the price that should have been collected was only a lesser sum than what was actually paid, it was open to the respondent to claim the excess and it was reasonable and proper that the excess paid should be refunded by the appellants. The rum of Rs. 9350 was paid as the amount legally due to the appellants and it was received by the appellants under such belief, though the belief was a mistaken one.

There is no evidence or proof that the money paid in excess of the controlled price was intended to be given away as a gift or a present to the appellants by any means, and such being the case, I am of opinion that Section 72 of the Indian Contract Act comes into operation and applies to the facts of this case. It must be stated that when the motor vehicle was delivered by the appellants to the respondent, it was delivered only on the basis that the price which was paid and received was only the controlled price. If that were so it cannot be said that there was any illegal contract entered into between the parties. The contract itself must be deemed to be to sell the vehicle at the controlled price, because the vendors were not expected to commit an offence by selling it at a price other than the controlled price. When it was later on discovered that the transaction had taken place actually not on the basis of the controlled price but on something different therefrom, certainly the appellants would be bound to return the difference in the price which they had received in excess of the controlled price.

The evidence of D. W. 1 also is to the effect that it was intended and the vehicle was actually sold for the controlled price which he believed was Rs. 9350 on the basis of the circular contained in Ex. A. 4(a). Therefore in such circumstances, money that has been paid under a mistake of fact must be recoverable by the party who parted with it. The mistake is only about actual price fixed by the Provincial Government for the car. This cannot be said to be money that has been paid under a mistake of law. The reasoning therefore in 'Shiba Prassd Singh v. Srish Chandra Nandi', (1949) 2 M.L.J.57 would seem to apply to the facts of this case. Even so, the decision in 'Sowdra Bai v. Saraswathi Animal', ILR (1042) Mad. 669 would apply to the facts of this case in full force. In 'Audinarayana v. Panchayat Board of Manganaka,' AIR 1940 Mad. 660 it has been held that a payment under a mistake of fact cannot be considered to be voluntary payment so as to enable the receiving party to retain the benefit thereof. Section 72 is clear and it is in the following terms :

'A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it.' Mr. Bhashyam, learned counsel for the appellants has invited my attention to certain passages in 'Jagadish Prasad v. Produce Exchange Corporation', AIR 1946 Cal. 245. It was held in that decision on the facts of that case that no mistake arose and I do not think the argument advanced in that case would apply to the facts of the present case. I am unable to agree that the exception mentioned in these decisions would cover the present case; nor does any question of splitting up the contract would arise in the present case. True, there cannot be any new contract substituted in place of the old contract under which the vehicle was sold; but what actually took place was that both the vendor and the vendee were transacting the business on the basis of the controlled price and when it turned out that the controlled price was less than the price actually paid and received, the simple thing that followed was that the excess received over and above the controlled price could not be retained by the vendor and the vendee was entitled to claim it back, because the money was paid under a mistake as to the fact of the price.

The argument of the learned counsel for the appellants that the appellants not being under any compulsion that the respondent should be sold a car and the respondent having received the benefit under the sale in that he got the car and therefore must restore back the car to be entitled to claim the balance overpaid, does not appeal to me; nor does the argument that the respondent should either return the car and get back the entire amount or get nothing at all appear to be valid, in my opinion. I am therefore inclined to hold that what the learned City Civil Judge has done in the circumstances is but the correct thing, and his decision has therefore to be upheld.

6. In the result, this appeal fails and the decree and judgment of the lower court are confirmed. The appellants will pay the costs of this appeal to the respondent.


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