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Mohun Lal Babu Vs. Udai NaraIn Bhaduri and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKolkata
Decided On
Judge
Reported in7Ind.Cas.2
AppellantMohun Lal Babu
RespondentUdai NaraIn Bhaduri and ors.
Cases ReferredSee Gouree Komal v. Raj Kishen
Excerpt:
contract act (ix of 1872), section 23, iii (i) - agreement defeating object of law--patni regulation (act viii of 1819), section 9--purchase by defaulter forbidden--agreement with defaulter to purchase and re-convey todefaulter, void--recorded patnidar, heir and legatee of--'actual defaulter.' - .....such a loan of only rs. 932, the amount of the arrear, taken and the arrears paid up? such a loan, udai narayan says, was promised and refused at the last moment. udai narayan has properties yielding eight to ten thousand rupees per annum and we do think it probable that he could not get a loan of rs. 1,000 from any other banker in the town at a moment's notice. it appears that the property had been once before sold for arrears and purchased in the name of his wife but the darputnidars paid up the decretal amount and had the sale set aside. there is evidence in this case that the darputnidars were in arrears and did not pay oven when they were dunned for the same about the time of the sale. if is natural, therefore, that udai narayan should take offence and think of teaching them a.....
Judgment:

1. The defendant No. 1 was a putnidar. His putni was let out in darputni to darputnidars, who were in the habit of paying the putni rent to the zemindar under some arrangement with the putnidar. They did not, however, pay the putni rent for the Jaista kist of 1313 and the putni mahal was advertised for sale on the 15th May 1906. The defendant No. 1, who had for several years past dealings with the Mahajani Firm of the plaintiff, and defendants Nos. 2 to 8 approached defendant No. 9 who was the head gomashtha of the Firm and after certain fruitless negotiations entered into a contract with him for the purchase of the putni at the Regulation Sale and a re-conveyance to defendant No. 1 on receipt of the purchase-money with interest at 12 per cent, per annum plus a remuneration of one thousand rupees. The putni was actually sold and purchased by defendant No. 10, another gomastha of the plaintiff's Firm for Rs. 7,000. The plaintiff took a release from defendant No. 10 stating that the purchase had been made for the plaintiff's Firm and then gave notice to defendant No. 1 to make the re-purchase under the term of the contract of the 15th May 1906 entered into with his gomastha defendant No. 9. The defendant failed to take the re-conveyance and hence this suit for specific performance of the contract of recovery of the money paid for the purchase with interest plus the remuneration of one thousand rupees. The defendant pleaded that the letter was taken from him by undue influence and coercion, by taking an unfair advantage of the difficult situation of the defendant, who had been given false hopes of a loan sufficient for the prevention of the sale and fraudulently refused at the last moment; that the contract was illegal and against public policy and could not be enforced and that the plaintiff had no right to enforce the same.

2. The learned Subordinate Judge has held that the story of undue influence and fraud is not made out but that the contract was illegal and against public policy being an unholy alliance to defraud the darputnidars, and dismissed the suit.

3. Plaintiff appeals and on his behalf it has been contended that no case of fraud is made out and the contract was a fair and legitimate one that does not contravene any principle of public policy or positive rule of law; that the plaintiff would not have purchased but for the request of the defendant and the latter should be compelled to make good his contract. It is admitted that defendant No. 1 was in the habit of taking loan on handnotes from the Firm and both defendants Nos. 9 and 10 admit that they would have no objection to pay him money on a handnote even to the extent of Rs. 30,000: why was not then such a loan of only Rs. 932, the amount of the arrear, taken and the arrears paid up? Such a loan, Udai Narayan says, was promised and refused at the last moment. Udai Narayan has properties yielding eight to ten thousand rupees per annum and we do think it probable that he could not get a loan of Rs. 1,000 from any other banker in the town at a moment's notice. It appears that the property had been once before sold for arrears and purchased in the name of his wife but the darputnidars paid up the decretal amount and had the sale set aside. There is evidence in this case that the darputnidars were in arrears and did not pay oven when they were dunned for the same about the time of the sale. If is natural, therefore, that Udai Narayan should take offence and think of teaching them a lesson. He could not bid for the property himself as Section 9 of the Putni Regulation VIII of 1819 forbade a bid by the defaulter. He could not purchase in the name of his wife with money borrowed by himself and if money was to be lent to the wife, the bankers wanted a pledge of her ornaments. Under these circumstances, the device of making the purchase through Sibkaran was made. Udai Narayan knew the yield of the property then was about Rs. 250 only and the price even at 25 years' purchase would not be more than Rs. 6,250. Why then did he authorize Sibkaran to bid up to Rs. 30,000? He admits that the profit of the darputnidars was Rs. 1,300 to 1,400 so that the profits of the property denuded of the darputni would be about Rs. 1,600, which at '20 years' purchase would be valued at Rs. 32,000 and at 25 years' purchase at Rs. 40,000. There can be no doubt that he contemplated purchasing the property through Sibkaran with the hope of getting rid of the darputni. The mention of Rs. 30,000 as the limit of the purchase and the indemnity provided in case of Sibkaran not bidding up to Rs. 30,000 leave no doubt in the matter. We cannot believe that. Sibkaran, who had had transactions, with Udai Narayan for the last 10 years at least and who had negotiated purchase of another putni of the defendant, did not know what the value of this property was and it is quite reasonable to Relieve that Sibkaran agreed to lend his name and his master's money for the purpose of helping Udai Narayan for a promised gratuity to get rid of the darputni. It is true that Udai Narayan was under no obligation to pay the head-rent for the purpose of, saving the darputni tenures. It was the business of the darputnidars to see that the head-rent was paid and they had their remedy under the Regulation Section 13, to make the payment themselves and save their property. The contract could not, therefore, be said to be fraudulent. But was it illegal Was it in violation, direct or indirect, of any provision of positive law Section 9 of Regulation VIII of 1819 provides that the defaulter shall not bid. was Udai Narayan the defaulter? It is not denied that he was. It is true that Rukmini Debya is the recorded proprietor against whom the proceedings under the Regulation were taken but he is her heir and legatee and the 'actual defaulter'. See Gouree Komal v. Raj Kishen 5 W.R. 106. Ha was, therefore, prohibited from bidding. The contract contained in the letter says Sibkaran was to purchase for Udai Narayan and Udai was to re-pay the money with interest and remuneration. This is exactly the case mentioned in the illustration (i) to Section 23 of the Contract Act. The Section provides that the consideration or object of an agreement is unlawful if it is of such a nature that if permitted it would defeat the provisions of any law and the illustration puts a case very similar to the present one. Such an agreement is void under Section 23 and this agreement is, therefore, void and incapable of enforcement for there must be a legal contract before it can be capable of being enforced. It may be that the defendant No. 9 entered into the contract without suspecting any such illegality but that cannot help him. Defendant No. 1 induced defendant No. 9 to enter into the contract and we think the Court below was right in allowing him no costs and we make the same order. The appeal is dismissed, each party will bear his own costs in both Courts.


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