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Pitchiah Pillai Vs. Govindaswamy Chettiar and anr. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai High Court
Decided On
Reported in(1977)1MLJ107
AppellantPitchiah Pillai
RespondentGovindaswamy Chettiar and anr.
Excerpt:
- - this document contained a number of clauses, one of which provided for the respondents getting the c form licence transferred in the name of the lessees, as well as the lessees alone being liable to the authorities for any irregularities committed in the course of running the cinema theatre. and according to the respondents there was a failure on the part of the appellant to pay entertainment tax to the tune of rs......of the theatre and, therefore, he was not liable to pay any of the amounts.5. the learned trial judge while holding that the appellant was put in possession of the theatre and he was running the theatre, came to the conclusion that exhibit a-6, the lease agreement, was hit by section 23 of the indian contract act, and, therefore, it was not legal and, consequently, the respondents were not entitled to recover the amounts claimed by them.6. on appeal, preferred by the respondents herein, the learned additional district judge of madurai, by judgment and decree dated 24th march, 1972, reversed the finding of the learned trial judge that exhibit a-6 was hit by section 23 of the indian contract act, but granted a decree in favour of the respondents only for a sum of rs. 6,239-20. it.....
Judgment:

M. M. Ismail, J.

1. The defendant in O.S. No. 138 of 1967, on the file of the Court of the Subordinate Judge, Dindigul, who succeeded before the trial Court, but lost before the first appellate Court, is the appellant herein. The respondents instituted the suit for recovery of a sum of Rs. 9,339.90 under the following circumstances.

2. Admittedly the respondents are the owners of a theatre known as 'Alagesan Theatre' and they were having a G Form licence for exhibiting cinematograph films in that theatre. Under Exhibit A-6 dated 11th April, 1968, an agreement of lease was entered into between the respondents on the one hand and the appellant and a partner of his named Seevalan Shahul Hameed, on the other for taking the said theatre on lease for exhibition of the cinematograph films. This document contained a number of clauses, one of which provided for the respondents getting the C Form licence transferred in the name of the lessees, as well as the lessees alone being liable to the authorities for any irregularities committed in the course of running the cinema theatre.

3. The respondents herein contended that on 22nd December, 1966, the Deputy Commercial Tax Officer made an inspection and found that the appellant had issued tickets in contravention of the legal provisions and levied as penalty of Rs. 6,146.56, which was confirmed in appeal, that the respondent had to pay the amount; the appellant committed similar defects on 8th January, 1967 and 14th January, 1967 and a sum of Rs. 634.50 had been levied as penalty; subsequently also on 27th October, 1967, another penalty of Rs. 7,707.42 was levied; and according to the respondents there was a failure on the part of the appellant to pay Entertainment Tax to the tune of Rs. 341.42, and dues outstanding to the Films Division of a sum of Rs. 143. The respondents also contended that the appellant had defaulted in payment of rent from 14th September, 1967 to 7th November, 1967 amounting to Rs. 1,767. The case of the respondents was that they had paid a sum of Rs. 5,646.56 towards the penalty levied during the inspection on 22nd December, 1966, after deducting a sum of Rs. 500 paid by the appellant himself, a sum of Rs. 634.50 for the penalties levied during the inspection on 8th January, 1967 and 14th January, 1967 and a sum of Rs. 7,707.42 for the defects found on the inspection on 27th October, 1967, as also the Entertainment Tax due to the Government and the dues to the Films Division, as pointed out already. Deducting the advance of Rs. 10,000 paid by the appellant, the respondents claimed that they are entitled to a sum of Rs. 4,472.90 under the various heads. In addition to that, the respondents claimed that a sum of Rs. 1,000 was spent by them in taking action against the appellant for recovery of stolen projectors, etc., and a sum of Rs. 100 spent for reinstallation of the machinery in the theatre and Rs. 2,000 was due as damages and Rs. 1,767 for arrears of rent for the period from 14th September, 1967 to 7th November, 1967.

4. The appellant contended that Exhibit A-6 agreement was not acted upon; he was not put in possession of the theatre and, therefore, he was not liable to pay any of the amounts.

5. The learned trial Judge while holding that the appellant was put in possession of the theatre and he was running the theatre, came to the conclusion that Exhibit A-6, the lease agreement, was hit by Section 23 of the Indian Contract Act, and, therefore, it was not legal and, consequently, the respondents were not entitled to recover the amounts claimed by them.

6. On appeal, preferred by the respondents herein, the learned Additional District Judge of Madurai, by judgment and decree dated 24th March, 1972, reversed the finding of the learned trial Judge that Exhibit A-6 was hit by Section 23 of the Indian Contract Act, but granted a decree in favour of the respondents only for a sum of Rs. 6,239-20. It is against this judgment and decree, the present second appeal has been preferred by the defendant in the suit.

7. Mr. Rajagopalan, the learned Counsel for the appellant, repeatedly-contended before me that the, learned District Judge reversed the finding of the trial Judge with regard to the illegality of Exhibit A-6 solely based upon Exhibit A-31, the order of the District Collector dated 16th July, 1966 permitting the respondents to lease out the theatre in question to the appellant herein, but the subsequent order Exhibit A-32 dated 31st January, 1967 issued, by the Collector showed that the C. Form licence was not actually transferred.

8. I am of the opinion that this contention, in addition to being beside the point, is not correct. In the first place, Exhibit A-31 merely says that the respondents herein were permitted to lease out the cinema theatre to the appellant herein, but it also stated that possession should not be handed over to the appellant before the C. Form licence was actually transferred. Exhibit A'-32 dated 31st January, 1967 was a notice issued to the respondents herein calling upon them to show cause why the licence issued in their favour should not be cancelled for the reason that the respondents had put the appellant in possession of the theatre even before obtaining the permission of the District Collector. According to Exhibit A-32, the application was dated 15th April,. 1966 and it was received in the office of the Collector on 19th April, 1966 and the Collector passed orders on 16th July, 1966 and possession was given to the appellant on 15th April, 1966 itself. In my opinion, Exhibit A-32 does not show that C Form licence was not transferred at all.

9. Independent of the above conclusion, I am also of the opinion that Exhibit A-6 cannot be said to be illegal? from any point of view. Exhibit A-6, as I pointed out already, is the agreement entered into between the respondents on the one hand and the appellant and one Shahul Hameed on the other. According to the terms of the agreement, it did not contemplate the respondents herein getting the G Form licence transferred in the name of the appellant. There is absolutely no term in Exhibit A-6 which can be said to be illegal on opposed to any of the provisions of law. As a matter of fact, to a specific question put by me to the learned Counsel for the appellant, he had to admit that Exhibit A-6 itself cannot be said to be illegal because, there is no term or stipulation or condition in Exhibit A-6, which is violative of any provision of law and according to the learned Counsel himself, it is only the conduct of the parties outside Exhibit A-6 that can be said to be illegal.

10. As far as Section 23 of the Indian Contract Act is concerned, it attaches itself only to an illegal contract and it does not attach itself to any illegal act outside a contract. Consequently, the very basis of the decision of the learned trial Judge that Exhibit A-6 itself was hit by Section 23 of the Indian Contract Act is not sound and, therefore, the first appellate Court rightly reversed that conclusion of the trial Court.

11. Mr. Rajagopalan repeatedly contended before me that the appellant sought to argue before the first appellate Court that the finding of the trial Court that Exhibit A-6 was acted upon and the appellant was put in possession of the theatre was erroneous, but the learned Additional District Judge rejected that case holding that the appellant had not preferred any cross-appeal or cross-claim on reliefs found in favour of the respondents herein and the reasoning of the learned Additional District Judge is erroneous because the suit was dismissed in toto, therefore, the appellant herein could not have preferred any appeal or memorandum of cross objections before the learned Additional District Judge. I am of opinion that this argument is misconceived. There is nothing to show in the judgment of the first appellate Court that the appellant wanted to canvass the correctness of the finding of the trial Court that Exhibit A-6 was given effect to and the appellant was put in possession of the theatre, but the learned Additional District Judge did not permit the appellant to argue that point before him. All that is stated in paragraph 8 of the judgment of the learned Additional District Judge is:

The defendant has not preferred any appeal or cross claim on reliefs found in favour of the plaintiff. Hence, the only question that is argued in the appeal is the validity of Exhibit A-6.

Whether the first sentence in the above extract is correct or not, the second sentence makes it absolutely clear that the only question that was argued before the learned Additional District Judge was concerning the validity of Exhibit A-6. Even in the Memorandum of Grounds of Appeal preferred before this Court, there is no ground that the appellant wanted to argue before the learned Additional District Judge that the finding of the trial Court in this behalf was erroneous and the appellant was prevented from doing so on the ground that the appellant had not preferred an appeal or memorandum of cross objections. Therefore, it is not now open to the appellant to raise that question in this second appeal.

12. No other point is urged before me. Under these circumstances, the appeal fails and it is dismissed with costs. No leave.


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