Mst. Phungan vs Chhajju Ram

K.K. Gupta, J.—Chhajju Ram, plaintiff-respondent, Mst. Phungan and Shiv Devi d/o Phungan Devi, defendants-appellants, entered into an

agreement in writing on Feb. 12, 1969, by virtue of which they agreed to sell land measuring 75 kanals 12 marlas comprised in Khewat No. 1,

situate in village Deval, tehsil Samba for a consideration of Rs. 5,000/- out of which they received an amount of Rs. 3,000/- as advance as part of

the sale consideration. The plaintiff filed suit for the specific performance of the contract alleging therein that on Aug. 12, 1969, he tendered the

remaining amount of Rs. 2,000/- to defendants and demanded execution of transfer deed but the defendants refused to do so.

The defendants took a plea that Shiv Devi, defendant No. 2 was minor at the time of execution of the agreement and was incapable of entering

into any valid agreement. The trial Court after framing preliminary issue to this effect came to the conclusion that Shiv Devi defendant was minor at

the time of execution of the agreement. In appeal, this finding of the trial Court was confirmed by this Court. Afterwards, the trial Court framed

issues and ultimately dismissed the suit holding that the agreement entered into between the parties was not valid being not enforceable in the eye of

law as entered into with a minor and also declined to give relief to the plaintiff for refund of the advance. In appeal, learned Addl. District Judge,

however, accepted the contention of the plaintiff to this extent that he was entitled to refund of the amount of Rs. 3,000/- which he had advanced

to defendants as a consequence of the void agreement. Aggrieved by this judgment, Mst. Phungan defendant has come up in second appeal before

this Court.

I have heard learned counsel for the parties and perused the record before me. The only point canvassed before me by learned counsel

appearing for the appellant is that the plaintiff-respondent did not seek refund of the advance amount in his plaint and as such this relief cannot be

allowed to him. In this case it is now not disputed that one of the defendants, Shiv Devi, who was a party to the agreement, was minor at the time

of its execution. The agreement as such was not a valid document in the eye of law. It cannot also be denied that this minor defendant cannot be

burdened with refund of the amount advanced at the time of execution of the agreement. Now the point for consideration is whether Mst. Phungan,

another defendant who allegedly received the advance amount can be asked for refund of the same? In this regard the relevant law is contained in

Section 65 of the Contract Act which provides that when an agreement is discovered to be void or when a contract becomes void, any person

who has received any advantage under such agreement is bound to restore it. It is clear from the abovesaid provision of law that the obligation of

the person to refund the consideration which had been received by him, under a contract which is discovered to be void exists even in the absence

of any specific contract between the parties for such a refund. In AIR 1926 Nag 108 it has been held that where the plaintiff was under a mistake

of fact as to the defendant's minority, which was not discovered till after the institution of the suit, Section 65 of the Contract Act would

undoubtedly apply. In the instant case, the facts reveal that the plaintiff was not in the knowledge about the defendant Shiv Devi's being a minor

and he came to know about it only when, during the proceedings, in the suit filed by him such a plea was taken by the defendants.

Section 65 of the Contract Act enunciates the principle of restitution and it should be elaborately construed in order to do equity and justice

between the parties. The intention of the section is to prevent a party from making an agreement void and retaining the benefits received under it. It

is clear from the provisions contained in this section that when a contract entered into between the parties is discovered to be void, the party

receiving advantage out of it be made liable to restore it to the other party.

Now the question which remains to be determined is : whether the plaintiff is entitled to refund of the advanced amount in absence of such plea

taken by him in his plaint Such matter was discussed in a Division Bench authority of the Rajasthan High Court reported as Municipal Committee,

Kishangarh Vs. Maharaja Kishangarh Mills Ltd., , wherein the following principle was laid down :

The learned counsel for the appellant urges that the relief u/s 65 of the Contract Act should not be granted where there is nothing to show in the

pleading that any such relief claimed. It is suggested that in granting any such relief the Court would be introducing a new cause of action which was

not set up in the plaint and when the pleading was never sought to be amended on that line. Reliance has been placed on a decision of the Calcutta

High Court in New Churulia Coal Co. Ltd. Vs. Union of India (UOI), .

Where further facts require to be investigated, it may be necessary to insist upon such an averment, in the pleading so as not to take the defendant

by surprise before granting relief u/s 65 of the Contract Act; but if on the facts found there is no difficulty in granting the equitable relief, it would be

unreasonable to refuse it on any such technicality. Das Gupta, C.J. (as he then was) recognised this principle in his judgment in the above case

relied upon by the defendant. He observed :

'I have, therefore, come to the conclusion that the mere fact that a claim u/s 65 of the Indian Contract Act on the basis that the contract had been

discovered to be void, was not made by the plaintiff in his plaint, is not by itself a sufficient reason why he should not be allowed to raise that point.

Where further facts require to be investigated, it would be reasonable to proceed by way of an amendment of the plaint to add such arguments.

Where, however, further investigation of facts is not necessary, the Court would be justified in giving the plaintiff relief under the provisions of

Section 65 of the Indian Contract Act even without a formal amendment of the plaint :

In another authority reported as AIR 1943 29 (Privy Council) , the plaintiffs sued to enforce a registered mortgage granted by the defendant's

father. The deed contained a personal covenant to pay interest half yearly and to repay the principal at the end of 3 years. The plaintiffs sought

relief both by sale of the mortgaged property and by enforcement of the covenant. The defendant maintained that the mortgage sued upon was

void. The trial Court sustained the defendant's contention and dismissed the suit. Before the Chief Court on appeal, it was contended for the

plaintiffs that they were at least entitled to relief u/s 65 of the Indian Contract Act. The Chief Court, however, left the plaintiffs to seek their remedy

by a separate suit, since the matter was not pleaded. On appeal, to the Privy Council, it was held that the plaintiffs should not have been refused

restitution u/s 65, even though that had not been pleaded as a separate ground of claim in the plaint.

In another case reported as Srinivas Ram Kumar Vs. Mahabir Prasad and Others, , their Lordships of the Supreme Court have laid down the

law in the following terms:

.........A plaintiff may rely upon different rights alternatively and there is nothing in the Civil P.C., to prevent a party from making two or more

inconsistent sets of allegations and claiming relief thereunder in the alternative. The question, however, arises whether, in the absence of any such

alternative case in the plaint it is open to the Court to give him relief on that basis. The rule undoubtedly is that the Court cannot grant relief to the

plaintiff on a case for which there was no foundation in the pleadings and which the other side was not called upon or had an opportunity to meet.

But when the alternative case, which the plaintiff could have made, was not only admitted by the defendant in his written statement but was

expressly put forward as an answer to the claim which the plaintiff made in the suit, there would be nothing improper in giving the plaintiff a decree

upon the case which the defendant himself makes. A demand of the plaintiff based on the defendant's own plea cannot possibly be regarded with

surprise by the latter and no question of adducing evidence on these facts would arise when they were expressly admitted by the defendant in his

pleadings. In such circumstances when no injustice can possibly result to the defendant, it may not be proper to drive the plaintiff to a separate

suit.......

The case of the plaintiff is that he advanced Rs. 3000/- for purchase of the land which deal could not be effected. The defendant, however, in their

written statement has denied the receipt of this amount but the first appellate Court on the appreciation of evidence recorded by the trial Court has

come to the conclusion that such an amount was advanced to the defendants. Moreover, the document reduced into writing in regard to agreement

to sell stipulates such payment. It is not a new case of the plaintiff regarding the payment of Rs. 3,000/- to the defendant as advance. Keeping in

view the law laid down in the above referred authorities I hold that no injustice is done in a case by granting equitable relief when such plea has not

been taken by the plaintiff in his suit. The plaintiff-respondent in the present case is entitled to such relief even though he has not claimed the same.

For the aforesaid reasons, I find no force in this appeal which is dismissed with costs.