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K.R.S.V. Muthayya Chetti and ors. Vs. Narayanan Chetti and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Reported inAIR1928Mad317
AppellantK.R.S.V. Muthayya Chetti and ors.
RespondentNarayanan Chetti and ors.
Cases Referred and Krishna Chandra Deo v. Srinivasacharlu
Excerpt:
- .....the firm of plaintiff 1 and defendants 5 and 6 to the firm of a.p.s. in rangoon on behalf of the firm of defendants 1 and 2. the subordinate judge has found that defendants 1 and 2 were indebted to the firm of a.p.s., rangoon, and that the firm of plaintiff 1 and defendants 5 and 6 called k.r.s.v. did actually pay moneys to a.p.s. firm on behalf of defendants 1 and 2. the plaintiff made a claim in the alternative against defendants 3 and 4 who constitute the a.p.s. firm, but subsequently withdrew that claim. the subordinate judge has found that although the plaintiff made these payments they do not come within the provisions of section 70, contract act, on the ground that the plaintiffs were not individuals who were interested in making the payments and the payments, therefore, will.....
Judgment:

Phillips Offg. C.J.

1. In this case the plaintiffs seek to recover from defendants 1 and 2 or in the alternative defendants 3 and 4 certain moneys paid by the firm of plaintiff 1 and defendants 5 and 6 to the firm of A.P.S. in Rangoon on behalf of the firm of defendants 1 and 2. The Subordinate Judge has found that defendants 1 and 2 were indebted to the firm of A.P.S., Rangoon, and that the firm of plaintiff 1 and defendants 5 and 6 called K.R.S.V. did actually pay moneys to A.P.S. firm on behalf of defendants 1 and 2. The plaintiff made a claim in the alternative against defendants 3 and 4 who constitute the A.P.S. firm, but subsequently withdrew that claim. The Subordinate Judge has found that although the plaintiff made these payments they do not come within the provisions of Section 70, Contract Act, on the ground that the plaintiffs were not individuals who were interested in making the payments and the payments, therefore, will not be lawful within the meaning of Section 70, Contract Act. The learned Judge appears to have confused Section 69 with Section 70. In Section 70 there is no reference to a person being interested in making the payment and it has been held by this Court from Damodera Mudaliar v. Secretary of State [1895] 18 Mad. 88 onwards, that Section 70 does not reproduce English law but has a wider scope. That case related to the execution of repairs to a tank by Government, the zamindar having also an interest in the lands under the tank. The Court held that the Government is entitled ,;to recover part of the cost proportionate to the benefit received by the Zamindar. The learned Judges did not purport to define the word 'lawfully' which occurs in Section 70 but they treated the section as having a wider scope in accordance with its wording and held that its scope was not restricted so as to conform to the rules of English law. They also held that it would not include the officious interference of one man with the affairs or property of another and it is now argued that this exception applies to the facts of the present case. Again in Venkatakrishnamacharlu v. Arunachala Pillai [1919] M.W.N. 244, Justice Abdur Rahim held that the meaning of the word 'lawfully' in Section 70 was merely bona fide and he based this view on the judgment of Ayling, J., in Saptharishi Reddiar v. Secretary of State [1915] M.W.N. 256. On reading Justice Ayling's judgment in that case it would appear that Justice Abdur Rahim has to some extent limited the definition of the former Judge, who interprets 'lawful' as meaning 'not unlawful' which is a very wide interpretation indeed. With all respects I would adopt Abdur Rahim J's interpretation as being a very good definition of the word unlawful but I must not be understood to mean that there may not be cases where this definition would not be applicable.

2. The facts of the present ease are that the plaintiff 1 and defendants 5 and 6 are brothers and members of the firm of K.R.S.V. They are uncles of defendants 1 and 2 who constitute the firm of M.N.V. and admittedly plaintiff 1, who lives in India near defendants 1 and 2, was advising their mother and guardian in the management of their business. Can it be said that a firm consisting of the uncles of defendants 1 and 2 one of whom was supervising the business of defendants 1 and 2 interfered officiously in discharging the debts due by the nephews to others? Undoubtedly, if plaintiff 1 made the payment, he could not be said to be acting officiously, for he was actually helping defendants 1 and 2 in the management of their business; and in the absence of evidence to the contrary he must be considered to have acted bona fide in their interests. It is contended by Mr. Padmanabha Aiyangar that inasmuch as the payment was made by the younger brother, defendant 6, it was an officious interference. It is argued that defendant 6 made the payment originally on behalf of the S.A.S. firm, but of that there is no evidence and we must take it that he paid it on behalf of K.R.S.V. as appears from the evidence, oral and documentary. He was a partner of plaintiff 1 and was the partner who was doing the actual transactions of the firm in Burma on behalf of plaintiff and himself and therefore his action was equivalent to the action of his partner in the firm when he purported to act on behalf of that firm. The payments therefore must be deemed to have been made toy the firm of which plaintiff 1 was a member and consequently were lawfully made. It is clear that they were not intended to be made gratuitously and defendants 1 and 2 have enjoyed the benefit thereof. Section 70 is clearly applicable and the Subordinate Judge was wrong in his conclusion.

3. Mr. Padmanabha Ayyangar then seeks to support the decree of the lower Court on the ground that the Subordinate Judge has misunderstood the evidence and has found on the questions of fact erroneously. His case now is that there were no debts due by defendants 1 and 2 to A.P.S. firm and that the payments made by K.R.S.V. to A.P.S. firm were not made on behalf of defendants 1 and 2. He relies partly on insufficient proof, as he calls it, of the plaintiffs' case and partly on inferences which he seeks to draw from the documents filed in the case. There is the direct evidence of plaintiff 1, defendant 3, a member of the A.P.S. firm, and defendant 6 of the truth of the plaintiffs' case and defendant 3 has hardly been cross-examined. Their statements are perfectly consistent with the documentary evidence adduced. No doubt the respondents' case may also be consistent with the documentary evidence and, if it had been put forward directly by any other evidence, would have been entitled to considerable weight; but there is no such direct evidence. Neither defendant 1 nor defendant 2 has chosen to go into the witness box and swear to the truth of his case. They have not produced their accounts and therefore every inference must be drawn against them. They have in no way rebutted the direct evidence for the plaintiffs. It may also be observed that the main evidence is oral and has been believed by the Judge who saw and heard those witnesses. It would therefore be very difficult to hold in the absence of any rebutting evidence that the Judge has come to a wrong conclusion. The appeal is accordingly allowed and the plaintiffs will have a decree as sued for against defendants 1 and 2 with nadappu interest up to the date of the Slower Court's decree and subsequent interest at 6. per cent. Defendants 1 and 2 will pay the plaintiffs' costs throughout.

Reilly, J.

4. I agree that we should not be justified in this case in differing from the learned Subordinate Judge's findings of fact. Mr. Padmanabha Ayyangar has been able to show us that there is a good deal of documentary evidence in the case which is consistent also with the theory which he has put forward on behalf of defendants 1 and 2, namely, as I understand it, that the payments in question were not payments of debts due from defendants 1 and 2 but were transfers of money belonging to defendants 1 and 2 from one firm to another in Burma. But that theory is opposed to the evidence of the witnesses examined in the case, whom the Subordinate Judge has believed. No witness was examined in support of the theory, not even defendant 1 or defendant 2, though both of them were majors at the date of the trial and their accounts were not produced. In the circumstances it would not be proper for us to interfere with the Subordinate Judge's findings of fact.

5. If those findings of fact are right, I agree that the Subordinate Judge has been mistaken in his application of the law to them. These payments appear to me to fall clearly within Section 70, Contract Act, not only in its literal interpretation, but as it has been interpreted in this Court, in Damodera Mudaliar v. Secretary of State [1895] 18 Mad. 88, and Krishna Chandra Deo v. Srinivasacharlu [1914] 38 Mad. 235. The payments were lawful payments lawfully made for no unlawful purpose. They were not made for any fraudulent purpose; nor without proper care, nor with any improper or ulterior motive, nor for any gain to the makers, nor against the will of the persons for whom they were made. It is not suggested that they were intended to be made gratuitously; nor can it be suggested on the facts found that defendants 1 and 2 did not enjoy the benefit of them. Indeed it appears that they adopted them. The fact of the payments being made was communicated at once to defendant 1 who was a major at the time they were made; he had an opportunity of disclaiming them but ha did not do so.

6. It appears that there is no reported case in which Section 70 of the Act has been enforced against a minor. But in principle I see no reason why the section should not be applied to payments made or acts done for a minor, though in practice perhaps a stricter standard of proof might be required that the payment or act was really for the minor's benefit than in the case of a major. But that question does not really arise in this case, because, although defendant 2 was a minor at the time when these payments were made, he is an undivided brother of defendant 1 who was then a major and must be regarded as the manager of their joint family. I agree, therefore, that this appeal should be allowed with costs throughout.


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